C-Corp to S-Corp

[Guest Neno]

Here is my scenario...XYZ Corp, for tax purposes, made application in 2003 to change from a C-Corp to an S-Corp. Letter from the IRS, dated May 19, 2003, received by XYZ approving change effective January 1, 2003. Owners were participating in the plan during the first part of the year (as C-Corp) but now will not be able to because of the S-Corp prohibition. My question is this: Must the contributions prior to May 19, 2003 be recharacterized as after tax since the "effective date" issued by the IRS was January 1, 2003 or can the contributions through the date the notice was issued (May 19, 2003) stand and just subsequent contributions be reclassified.

Any help in this matter would be greatly appreciated.