7004 Extensions - Error F7004-904-01 Fix

[KenGreenberg]

I'm sorry to post this just past the due date for 1120-S extensions on form 7004. But I only got this solved today!

Background and Context

I had a handful of the 7004 extensions reject for this error, Code: F7004-904-01:
"Form 7004, the tax year ending date ('"TaxPeriodEndDt" specified in the Return Header) must match the data in the e-file database unless one of the checkboxes in Line 5b - "Initial Return", "Final Return" or "Consolidated return to be filed" is checked."

These were either new LLC's filing as S-Corp, or existing LLCs filing their first 1120-S return. In each case, I had the "initial return" box checked - as recommended on the miscellaneous screen - but they rejected anyway.

Proconnect Software Bug

I was lucky enough to connect with a knowledgeable agent at the IRS hotline on the reject error: 
(866) 255-0654. This number is not for taxpayers.

While I had checked the box 'Initial return' and another box if this was the first-time electing S-Corp status, the IRS agent told me that the form they received did not have the Initial Return box checked. 

I then looked at the form 2553 in the check return / forms preview, and she was right: The initial box was not checked! When I hovered over the initial return box on the form - or clicked on it - the value showed a '1' - usually an indicator that it's on. But it wasn't checked, and so IRS got a form that didn't have the box checked and that's what caused the reject!

Frankly, IRS would do us all a favor if they were more specific in the error - but the reject error does discuss checking some boxes.

THE FIX

You must check short return - even for a full year. In the start date but 1/2/YEAR e.g.1/2/2023. The end date can be 12/31/ YEAR. CRITICAL: You must indicate January 2 - one day short of a full year or the "Initial Return" box will not fill in!

This can also work for a shorter year - but not a whole year - which is why you must lose at least one day. 

if this is their first S-Corp return, then before you e-file double check a preview of the 7004 and be sure you see the initial return box checked.

Proconnect's failure to check this box is what causes the reject!

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Attention moderator and Intuit Staff: please report this bug. Checking the "initial return" box on the Misc screen should be the only requirement for the 7004 to complete correctly and check the initial return box on the form. There's no reason to put bogus dates in the short year section. Checking the "initial return" should do the deed!