I tried to E-file my 2017 Corporate taxes for my C-corp today using TurboTax Business 2017. I was unaware that I had to pay taxes quarterly and even worse I thought that corporate taxes were due today, 4/17/18. Although the business has been around for serveral years, this is my first time filing anything. Yes, I learned why this is bad later on. Just letting you know to save you a few keystrokes about those mistakes.
Anyways, I revoked my Sub-S status during the year 2016 and received a confirmation letter from the IRS indicating such.
When I went to file an 1120 today, I was not permitted to E-file. After being on hold for a few hours, I was advised as I had suspected.
My Sub-S status was revoked but then someone mysteriously made it an S-corp again a few weeks later.
The system was expecting an 1120s. I was told to paper file, render payment, and that the IRS would fix the issue in 4-6 weeks.
My concern is that I took no dividends or salary from my C-corporation. I depended on savings and W-2 earnings as an employee of another company for the year 2017. In my poking around here, it seems that is generally ok with the IRS since they'd be getting more tax anyhow. I have also read that is a no-no with an S-corp as the expectation is that you write yourself a "reasonable salary".
I am particularly concerned that when I file, I will be treated as an S-corp due to their mistake (heck it could even take 6 weeks for them to tell me it wasn't a mistake) and end up increasing my audit risk.
I am tempted to include a letter requesting that they treat my corp as a C-corp upon receipt.
I am also tempted not to file until they fix the situation and then requesting that they backdate to the date of attempted filing.