QUESTION
Is it legal for a company to change the corporate structure without notifying the employees?
Asked on Jul 21st, 2011 on Taxation - California
More details to this question:
My company adopted a tax strategy in 2009, part of which was to change from a C corp. to an S corp. effective 1/1/2010. I was not aware this change had taken place and continued to operate as a C corp. filing my taxes as such. The I.R.S. would like me to refile as an S corp. or submit a revocation statement. In a perfect world I would have the S corp. be nonexistent. I can provide much more information but this is the gist of it. Can you help me?
1 ANSWER
Bruce Givner
The corporation does not have any obligation to notify its employees about its tax structure. However, the nature of your question suggests you are not merely an employee, but that you are also a shareholder. Is that the case? If you are a shareholder, then it could not have changed from a "C" corporation to an "S" corporation without you signing a shareholder's consent.
Answered on Jul 22nd, 2011 at 11:02 AM