Accounting Harry Baker formed Xeno Corporation on January 4, 2017. The corporation filed a valid S corpora-tion election on January 19, 2017, to be in effect for 2017. Harry, the corporation’s sole shareholder, consented to the election. The corporation had business ties to Mexico, and to strengthen these ties, Harry sold 25% of his Xeno shares to Pedro Gonzales on February 10, 2018. Pedro is one of Harry’s business associates and is a citizen and resident of Mexico. Harry continued to operate Xeno as an S corporation throughout 2018. Early in March 2019, Harry became aware that, by selling stock to an ineligible shareholder, he may have jeopardized the corporation’s S election. Thus, Harry immediately contacted Pedro and persuaded Pedro to sell his Xeno shares back to him (Harry). Harry hires you as his tax advisor on December 17, 2019, at which time you learn about the sale and repurchase of the Xeno shares. However, Harry tells you not to worry because, by buying back the shares, he already has rectified the situation, and thus the IRS need not be told about the transfers. How do you advise Harry on this matter?