S corp not accepted for 2022, BUT there's proof of mail

Technical topics regarding tax preparation.
#1
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Afternoon. This is a part II to an earlier post. Client wants to file first short year of entity (2022) as S corp, and filed 2553 on time to make the election. IRS denied the election for 2022, saying that 2553 was filed late, and set effective date as 1/1/23. 1120-S for short year 2022 hasn't been filed yet (and wasn't extended), one of the members has already filed 1040, without the K-1. At first, I was exploring the best way to deal with this as a late election, but my client has found proof of timely mailing, with tracking number that we can trace to proof of delivery -- all timely. Given that, what's the best way to file this return to give it the best chance to be accepted without issue? I'm planning that the return will have to be filed my mail, with the assumption that 1120-S efile would reject for 2022. Is it better to file the return with 2553 treated as late election, but with all the proof of how it's not actually late also attached? Or is it better to file the 1120-S by itself and address the denied 2022 election separately, with proof of timely mailing? Or is there a better way to go?

Thanks!
 

#2
Big E  
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If you have a POA for this client I suggest you call the Practitioner Priority Service 866-860-4259
If not, then there's a Business and Specialty Tax Hotline at 800-829-4933
 

#3
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Thanks! Now all I need is for them to pick up...
 

#4
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What do you know, they called me back! Just wanted to pass along the solution, for others who might need it. Agent said that faxing POA, 2553, and proof of mailing directly to the practitioner priority service, after an initial call to connect with an agent and get his/her fax number, is the best way to go. They can refer the issue to be corrected and it'll be a lot more likely to resolve the problem than trying to do it through mail. He also told me that even with the incorrect entity type on file for the client right now, efile of 1120-S will go through. Issues around entity type are so common that they are set up to accept the first return as 1120-S regardless. It won't be processed until the entity type is actually corrected, but in the meantime, it will be considered as being received. Same is true for extensions.

Thanks for the advice!
 

#5
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I suggest you file as you wish and worry about it later if the IRS sends a letter. Or you can mail the return with a cover letter explaining the situation.
Steve
 


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