Thank you for your response. The issue is that although an S-corporation election was made, we recently discovered that the election was not processed in the IRS system.  As a result, the Form 1120-S was also not processed.  According to the IRS agents, the S-corporation election was rejected; however, there is no record in their system indicating the reason for the rejection. 

My main question is why the return was accepted as an S-corporation return in ProSeries when the IRS had not accepted the S-corporation election.

The reason we are considering filing a C-corporation return (Form 1120) is that a third party urgently needs to verify that our client has filed a corporate tax return.