My new client has been a very profitable Sole Proprietorship for multiple years, and her only tax strategy was to contribute approximately $20K SEP IRA for the past two years.  

I took over this client and noticed her large schedule C profit for at least three years, and considering to use Rev. Proc 2013-30 to retrospectively elect S-Corp status.  I also noticed significant missing tax deductions due to the bookkeeping error (equipment purchases were booked into equity distribution).  For the two reasons, I think her prior year tax returns are worth amending.    

But this will push part of her prior year SEP IRA contribution into the bucket of excessive contribution, and she probably would subject to the exercise taxes.  I see the IRS allows SEP IRA to be converted to a qualified plan 401(k) and have a tax free roll-over. 

I am not familiar with how such roll-over would affect the prior year contribution limit, but do you think this conversion would be able to reduce the excessive contributions made in the prior year when the plan was a SEP IRA, in the context of amending the prior year tax return which will result in a much smaller tax liability overall?