S Corp extensions after election

[Aaron]

When you have clients that have a proper and timely 2553 filed in the prior year but the IRS rejects the 1120S extension because they haven't changed the entity in their system do you just paper file the S Corp extension?

This is how I normally do it but will often get a letter asking where there former entities return is. (1065 or 1120)

Do you have a different approach?

[sjrcpa · Accepted solution]

Paper file with proof of mailing.

You are saying 2553s were filed on or before 3/15/20 for 2020 S elections and the Service has not posted them yet?

[Aaron]

Most of them are new entities in 2020 with the 2553 filed within 2.5 months of formation. Formation in October 2020 with 2553 filed in November 2020.

Here is a similar question for you: Taxpayer was operating as a sole proprietor for January and February. They want to do an S Election. Unfortunately, because they were not an LLC, 1065 or Corp the S Corp can only start with the date they incorporated (treated as new entity). Whereas, a disregarded LLC can elect back to the 1st of the current year if filed by March 15th. You agree?

I really appreciate you taking the time to respond to my initial question.

[sjrcpa]

Yes I agree.

You're welcome.

Thanks for letting me know IRS wasn't backed up as far as I was thinking it was.

[Aaron]

Spoiler

That's funny. I was trying to figure out if you were being a bit sarcastic.