Level 1

Unfiled tax returns

Forum|Forum|5 years ago
November 29, 2020
2 replies
14 views

Scenario:

We have a new client this year that we had a lot of trouble obtaining information from. Upon completion of her personal and CCorp taxes on 10/15 we discovered that she had an additional SCorp. The SCorp was formed over 20 years ago and has never filed a return. We can not be certain that the 2553 was filed either. The SCorp holds real estate and as far as we can tell, did not generate any income until 2019, when a piece of land was sold.

Do any of you have any thoughts or suggestions on how to best handle this situation?

This topic has been closed for replies.

sjrcpa

Level 15

Verify that there actually is a corporation.

Verify that this corporation actually owns the real estate.

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

BobKamman

Level 15

Specifically, most states have a website where you can check the current status of a corporation. My guess is that it was dissolved many years ago, and the assets now belong to the shareholder. @qbteachmt Raises a good point -- who has been paying the real estate taxes?

qbteachmt

Level 15

Holding real estate in an S Corp structure is probably the worst way to do this; you should be able to check on the Title of that property, as well as how the property taxes were being paid. Even if there is no other activity, there would be something documented for legal assignment purposes.

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