Level 10

Solved

Scorp election not yet made. IRS thinks it is a C....so the return was rejected

Forum|Forum|4 years ago
March 14, 2022
4 replies
19 views

Tried to file an extension.

New corporation in 2021. EIN confirm received stating that the return is due April 15. Therefore, the IRS assumes it will be a C. But the client has not yet filed 2553 so the IRS doesn't know it will be an S.

Extension request was rejected with the message: "The IRS believes that the entity type of the client does not match the entity type in the electronically filed extension. You must contact the IRS to resolve the error."

Phone call attempted but the IRS is extremely busy.

This situation must be somewhat regular. I'll file a paper 7004 unless someone has a solution for me.

Lacerte Tax

This topic has been closed for replies.

Best answer by sjrcpa

Paper is the way to go here.

sjrcpaAnswer

Level 15

Paper is the way to go here.

The more I know the more I don’t know.

IRonMaN

Level 15

Did two paper extensions this morning for a couple of folks that either forgot to file their sub S elections or the elections are still sitting in the Mt Everest stack of papers the IRS is trying to process.

Slava Ukraini!

S

strongsilenceAuthor

Level 10

Did 1 return and 1 extension this morning. Both are S corporations that have successfully filed in the prior year and going back several years. Both were rejected with the same error -

"...the filing type must match the filing type established with the IRS for the EIN."

I doubt it is fraud because the corporations don't have refunds.

A

amec

Level 5

Try to input that this is the first year filing as an S corporation. If that doesn't work, add a 1 or 2 to the 2553 input screen at the top. I e-filed an extension this way recently with no problem.

IRonMaN

Level 15

But it is a problem for e-filing

Slava Ukraini!

A

amec

Level 5

That's my point. It's not a problem for e-filing.

T

TaxGuyBill

Level 15

@strongsilence wrote:

Tried to file an extension.

New corporation in 2021. EIN confirm received stating that the return is due April 15.

The election is late. Does it qualify for the late election? If they applied for an EIN and choose C-corporation, that could indicate that they did not "intend" to be taxed as a S-corporation, which is one of the requirements.

S

strongsilenceAuthor

Level 10

It qualifies for the late S election.

It is possible she applied to be an C Corp. She didn't save the SS-4 application and so I don't know.

Sign up

Login with SSO

Let's get you signed in

Login with SSO