Problem - Who Benefits from the Change in Tax Year

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Problem - Who Benefits from the Change in Tax Year?

Ajit, a public accounting sole practitioner, has reached a breaking point. All of his clients use the calendar year to report income. Many of the clients are S corporations and partnerships. Ajit's workload the first four months of the year is so heavy that it is putting the quality of his work at risk. He is considering telling his clients that any new partnership or S corporation that is formed must timely elect under the required tax payments system to use a fiscal year ending September 30 (assuming that the required year would other-wise be a calendar year). Although the shareholders and partners would be subject to the required tax payments rule, Ajit will sell the plan to them by promising better service. Evaluate the plan proposed by Ajit.

Reference no: EM132672156

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