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Sub S return rejected by IRS
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bob59
Level 1
03-08-2022
12:23 PM
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I have a client that never received their S election acceptance for a new corporation. Calling the IRS has been useless. I tried to file an extension and the IRS said there is no S on file. Any suggestions on what to do ?
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3 Comments 3
joshuabarksatlc
Level 10
03-08-2022
12:46 PM
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Did the corporation file 2553?
I had a situation for 2020. Client filed 2553 for 2020 in January but never got the determination letter. Client had certified mailing for proof of timely file.
Came 3/2021, extension was rejected because "IRS record doesn't recognize it as S corp".
I paper filed the extension with certified mail.
In summer paper filed 1120S and e-filed CA Form 100S with 2553, showing "file pursuant to Rev Proc 2013-30" on 2553 (Lacerte Screen 38, Part 1), In the explanation, the info that 2553 had been timely filed was included.
In September or October 2021 corporation got a late filing penalty notice.
In November 2021 corporation got the S status determination letter, effective Jan 2020.
In January 2022, the penalty was waived.
A happy ending...
I guess the processing of 2553 was just greatly delayed.
By the way, on Screen 3 "Explanation on top of form 1120, I also entered: "INCLUDES LATE ELECTIONS FILED PURSUANT TO REV. PROC. 2013-30".
Hope this helps.
I come here for kudos and IRonMaN's jokes.
IRonMaN
Level 15
03-08-2022
12:57 PM
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Two years ago we attempted to file two first year Sub S returns. Both of them were rejected so we paper filed both of them along with the 2553.
Last year we attempted to e-file both returns. Both were rejected again.
The other day I tried filing extensions for both of them to see what their status was. One was accepted and one was rejected. Progress??????
Slava Ukraini!
joshuabarksatlc
Level 10
03-08-2022
01:06 PM
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Oh boy, I need to modify as follows:
I had a similar situation for 2020. Client incorporated in September or October 2020 and right away filed 2553 for 2020 (in the incorporation month) but never got the determination letter.
The client who incorporated in January didn't file 2553. Its late election was accepted. Also a happy ending...
Thought that would clear IRS' name a little bit.
I come here for kudos and IRonMaN's jokes.
