How to Convert a Subchapter S Corporation to a C Corporation
S Corporations have tax advantages over regular corporations as their income passes through the S Corporation to the shareholders, similarly as in a partnership. Over the time of the S Corporation, the S Corporation may find it prudent to change its status back to a regular corporation. At least half the percentage of stockholders must consent to the revocation. After becoming a regular corporation again, the company cannot file S Corporation status again for at least five years.
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Instructions
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Write a revocation letter. In the revocation letter, the S Corporation must include the number of stock shares issued and outstanding.
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Receive the consent of shareholders. In the shareholders consent, the shareholder must disclose their name, address, TIN, how many shares they own and when he received the shares, and the taxpayer's tax year. The shareholder must then sign this statement.
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Mail the revocation letter and the shareholders' consent letters to the IRS service location where the S Corporation initially filed their S Corporation status election.
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References
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