LLC filing as S-Corp wants to convert back to a single-member LLC - possible without starting fresh?

The good news is that he can change the tax treatment of the LLC by filing a new 8832, in this case checking box 6c to turn it back into a disregarded entity.

The bad news is that (with exceptions that don't seem to apply here) he can only do that once every 60 months, so his choices are to stay an S-Corp until 2020, or else shut it down.

The instructions for Form 8832 are reasonably clear on this.

Client of mine was a single-member LLC in 2014, made an S-Corp election that was effective starting in 2015 and continued to be one in 2016. Things haven't panned out from a tax savings standpoint the way they hoped, mainly because the business didn't bring in as much honey as they hoped and they are considering converting back to a single-member LLC just to simplify things again.

Rather than dissolving the whole business and starting over with a new federal identification number, can they simply revoke their S-Corp status at the federal and state levels, and go back to being a single-member LLC? Or when they revoke their S-Corp status will the entity default to being a C-Corp? ============ Revoking S-corp status means that it will be a C-corp. Anything else requires a new EIN as it would be a change in the form of the entity. In general, the non-corporate "choices" are sole-prop., QJV with spouse, or partnership, and depend on the number of owners and how they may be related. As you said "single member," then sole-prop is the only available non-corporate choice.

If you look at Form 8832, you will notice that once he answers Yes to Q2a and No to Q2b, he is done. The Form can not be used to reclassify. See D. Stussy reply.

It might seem that way, but I was surprised to find last year that when I bought out my partner in my LLC thereby ending the partnership and turning it into a disregarded entity, the IRS instructions were crystal clear that it keeps the EIN even though the form of the entity is different.

Take a look at the instructions for form 8832 and see what you think.

R's, John

Yeah, that was the bad news, he has to wait 60 months to reclassify.

R's, John

There are two separate issues here. The S-Corp election can be revoked at any time, but the entity will then become a C-Corp. The LLC can revert back to a single member LLC treated as a disregarded entity only after 60 months as an S-Corp since it didn't elect S-Corp treatment at its creation.

Ira Smilovitz, EA