S-corp election not processed?

[joanmcq]

Client formed a corp in Nov 2020 & thought she had elected S status. I found out last year when I tried to file the extension, that S hadn’t been elected. No problem, filed late 2553, return e-filed, all is good.

this year the extension was just rejected again because it’s the wrong type of corp, just like last year. Seems the 2553 still hasn’t been processed? Got lost? Was rejected and they didn’t tell us?

Should I file the extension as a c-corp?  should I file another 2553?  File the return right away with 2553 (since that’s the only way it’ll e-file)?

[jasdlm]

I had this happen for years (literally) on an S-Corp I filed.  I just kept paper filing the return and sending in another copy of the original (signed and dated) S corp election. The client got audited during this time (no change audit), and I even gave a copy of the 2553 to the auditor and  told her what was happening.  She took it and said, 'yes, we're having a lot of trouble with that'.  Never did get changed, and about 5 or 6 years go client closed the S corp and started a new LLC with a new S corp election.  That's how we finally got rid of the problem.  Never heard anything regarding the old S corp.  Eeegads.

[joanmcq]

I do not want to subject this to a paper file right now!!!

[Lion EA]

Following, because I have two S-corp extensions to file by Tuesday.

[jasdlm]

8 minutes ago, joanmcq said:

I do not want to subject this to a paper file right now!!!

I get it.  Only option for efile that I know would be to file with the 2553.  I wouldn't file a C corp extension.  I would probably paper file an S corp extension with proof of mailing before I would file a C corp extension. 

[joanmcq]

Should I mark on the 2553 that it was done in a prior year? And attach the prior year 2553?

[Abby Normal]

45 minutes ago, Lion EA said:

Following, because I have two S-corp extensions to file by Tuesday.

You can extend as an 1120 and it will count for an 1120S. I know the due dates are different, but it works. So efile the 1120 extension then paper file an 1120S extension, and refax the 2553 to the IRS with explanation.

[Lion EA]

I'm working on an S-corp now and have another that'll probably need an extension. I'm hearing about this issue on all my message boards, so am worried about filing these two as either extensions or returns, plus I have a partnership extension to file. All of these businesses are decades old and all have e-filed for the whole time I prepared them and maybe longer and some have had e-filed extensions before. So if they all bounce back Monday? I really don't think I should file new 2553s. Paper file extensions? E-file C-corp extensions, if they're accepted. They're in three different states, so I'm panicking about getting them e-filed &/or postmarked by Tuesday. Can the IRS get any more broken?1

[Lion EA]

1.) Is proof of mailing the same as tracking?

2.) Is this happening on e-filed RETURNS as well as e-filed EXTENSIONS for S-corps?

3.) Partnerships?

[joanmcq]

Hey Lion, the other 2 S-corps I filed extensions for (that I’ve been efiling for years) went through fine. This one formed last year and I had the same issue with the 2020 filing, but I filed the 2553 with the return.

[Lion EA]

Thanx, Joan. Trying to pump out one more S-corp for signatures and then have a couple extensions to file last minute. (And, all my individual clients are nagging for progress reports.) I'm more hopeful now.

[G2R]

Has anyone had ANY extensions be accepted in the last 24 hrs.  I sent out a bunch yesterday and so far, they are all still waiting for acceptance.  

[schirallicpa]

Ugh - this is what I just posted about.  A 2553 we mailed in in November hasn't been processed.  

And I have a NYS sub s corp that we've argued with NY for 4 years on whether the forms were filed yet.  I have mailed stuff in mulitple times to NY.  

 

[TAXMAN]

I filled a 1120s extension. proper 2553 election made during summer. IRS rejected saying extension was not for the ein# assigned. I have a stamped copy saying they had received my 2553. Now what should I do about the extension. I can do what abbynormal suggests. But would efile extension for a 1120 really work for a 1120s?

[G2R]

4 hours ago, TAXMAN said:

I filled a 1120s extension. proper 2553 election made during summer. IRS rejected saying extension was not for the ein# assigned. I have a stamped copy saying they had received my 2553. Now what should I do about the extension. I can do what abbynormal suggests. But would efile extension for a 1120 really work for a 1120s?

I would paper file the extension with documented copies of the 2553 filed timely, certified mail.  Then if you still haven't heard anything when you're ready to file, file the corp return with late election noted at the top of 1120S, and again, a copy of the timely filed 2553 with a note of all the history of trying to get this filed properly.   What a mess.

[G2R]

Separate question.  Is there any way to confirm an S-election status?  I have two clients (new) that started businesses last year, that filed form 2553 (supposedly) but never got a letter from the IRS of the S-Corp approval.  Is there a way to confirm without .... (gulp) .... calling the IRS?

[joanmcq]

Try to file it, lol.

Another question: how do you efile the c-corp extension?  Set up a second file?

[cpabsd]

On 3/14/2022 at 9:38 PM, G2R said:

Separate question.  Is there any way to confirm an S-election status?  I have two clients (new) that started businesses last year, that filed form 2553 (supposedly) but never got a letter from the IRS of the S-Corp approval.  Is there a way to confirm without .... (gulp) .... calling the IRS?

It was recommended to me, if the client does not have a copy of the letter from the IRS, file another F2553.  If they have current S corp status, the IRS will send a letter saying that you are already and S corp so no need to file.  That letter will serve as your verification of S corp status.  Of course, that was before 2020 and I did that for a client and it worked exactly like it was supposed to.  Who knows now if that would work.