One of my clients asked me to "do his taxes right" for him because his past tax preparer has been filing a Schedule C instead of an 1120 -- he is worried that he will be hit with a penalty and interest on the past 16 years of incorrect tax return filings....but he has also paid SE taxes that were pretty huge.  I called his tax preparer and she said she HAS been filing 1120s but  I think she doesn't know the difference between Schedule C and an 1120.

My question:  Client is concerned that if he awakens a sleeping giant he won't be able to pay the penalties, and any corporate taxes due for the past 16 years -- even considering the SE taxes he paid.

My suggestion:  terminate the corporation and have a talk with the tax preparer that the wrong taxes were filed.  I'm kind of stumped that IRS hasn't contacted him that his Corporate Taxes have never been filed.