S-corp Rejection

[mvp2885]

Hello everyone. I have a client who I prepared an 1120-S, e-filed it, and it was rejected. The reason for the rejection is as follows "The return type indicated in the return header must match the return type established with the IRS for the EIN." The client then sends me a notice called 3853C saying that they don't have any record that he ever filed a 2553. He did his taxes in 2020 for 2019 return elsewhere, and the copy he provided me stated that the person who prepared his taxes, under the 1120-S he checked the box "is the corporation electing S corporation beginning this tax year" and selected "yes" and attached a 2553 with late filing reason "I was not aware of the election." My dilemma is if they filed electronically, including the 2553 or if it was mailed. I need to ask the client this, but I am not sure if the 2553 can be e-filed with the 1120-S?

Anyways, now this year, he is being rejected, so what options are on the table? The rejection reason gives me a number to call, which seems to be the e-services number for the IRS.

Thank you.

[dkh]

Yes, F2553 late election can be sent as an attachment to an efiled SCorp return.  The client should then receive some correspondence either a letter with S election acceptance or denial.     And as you have figured out, since you are receiving a rejection, the client has not been approved yet.   That would lead me to believe the return was mailed and is sitting in a pile of unopened mail. 

[qbteachmt]

"That would lead me to believe the return was mailed and is sitting in a pile of unopened mail."

Maybe. But, I would recommend getting their tax transcript. It's just as likely the 2019 got rejected, too. And the client ignored the notice or didn't recognize what it meant. I would treat 2019 as "unknown until I learn directly."

[dkh]

For me this would be one of those clients that you wish had never walked in your door because you know as soon as you get there mess straightened out they will be off to another preparer.