We have a very small S-Corp in Oregon. We are moving to TX. Getting set up to do business as a foreign entity is more expensive than incorporating in TX, so we will set up a new corporation there and then close the one in Oregon.
There will be some time overlap between getting the new corporation getting set up and the one in OR closing.

Is there anything special I need to know or do in regards to the IRS. Will the fed Tax ID stay the same and I just need to update the mailing address? Will the bookkeeping and income reporting all stay together under one business identity as far as the IRS is concerned. Or do we have to treat it as if it was a totally separate business starting in TX?

Do we have to get a separate bank account or just continue to use the same one. Our business is strictly over the internet and the money comes in from the merchant credit card processing center directly to the business bank acct.

Any advise is surely appreciated! Thank you.

1. Is there anything special I need to know or do in regards to the IRS. Will the fed Tax ID stay the same and I just need to update the mailing address?
The Fed ID will be that of the new Corporation, and the old corporation should be closed out. The new Corporation will have your new address so you need not worry about the old address.

2. How do you close out the Old Corporation?
You will file a final year tax return on the Federal Return, and this is done by Zero-ing out the balance sheet, and indicating "FINAL" on the Tax Return. Please use the new address on the Final Tax Return of the old Corporation so that you may receive all the correspondence from both the IRS and the State.

Also, you are required to file a formal dissolution of the old Oregon Corporation with the Secretary of State for Oregon. There are some formalities in closing out a Oregon Corporation and you should contact the State to determine their specific requirements, this may also involve you having to pay a minimum tax on the final tax return.

3. Will the bookkeeping and income reporting all stay together under one business identity as far as the IRS is concerned. Or do we have to treat it as if it was a totally separate business starting in TX?
You will have to introduce a new set of books and income reporting for the new entity. The two entities do not get merged. They have to have a separate set of books and records. The transfer of any assets including cash from the old Corporation to the Newly Formed Corporation is a Non-Taxable event, and this is reflected as a Capital Contribution consisting of Cash and other assets.

4. Do we have to get a separate bank account or just continue to use the same one. Our business is strictly over the internet and the money comes in from the merchant credit card processing center directly to the business bank acct.
You must have a separate bank account that can only be opened if you provide the bank with a new registration or incorporation paperwork along with a new EIN#. I would suggest that you inform all the merchants of your new Corporation and New Bank Account information or else you will not receive any deposits from your customers!

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.