Question

Suspended C-Corp Revival of Business

Forum|Forum|4 years ago
December 20, 2021
2 replies
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I'm wondering what the best direction to file my late tax returns for my Suspended C-Corp.

I've filed them once with my personal taxes back in 2015 and I believe it was suspended from 2017 until now. I now am looking to file these late returns in order to revive the business. I spoke with the IRS and they stated amounts that were due based on estimates but no income was made on these suspended years. If I file this years returns as I did in 2015 and file the late returns later this year will there but an issue? I'll have to get a tax expert to file that no income was made those years and go from there.

A

Anonymous_

Employee

You need professional tax preparation for the Form 1120 to have a better chance of meeting the IRS reasonable-cause criteria for late filing.

M

Mike9241

there would be no late filing penalties if the corp had no tax liability. however, for the earliest years (2015-2017), any estimated tax payments would be forfeit because the returns were not timely filed. another issue, have you been paying and filing any annual reports/franchise tax returns required by the state of incorporation. failure can result in automatic dissolution of the corp, but then again some states allow reinstatement if the past due items are filed and paid.

A

Anonymous_

Employee

Unless exempt under section 501, all domestic corporations (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income.

The minimum penalty for a return that is more than 60 days late is the smaller of the tax due or $435. The penalty will not be imposed if the corporation can show that the failure to file on time was due to reasonable cause.

Rick19744

Employee

I agree with the overall premise that you should get a tax professional involved, even if you did not have any activity.

You will most likely receive correspondence from the IRS as a result of the late filed returns. The minimum penalty mentioned by @Anonymous_ has varied over the years so depending on the year your penalty will run from around $210 ish to the $435 for the respective year the return was filed late.

Your tax professional will be able to help you respond to the IRS notice and possibly get a tax penalty abatement. You will need to come up with a reasonable cause as has already been noted.

Keep in mind, your C corp was not "suspended" in the eyes of the IRS.

Also make sure you contact your state to see if there is something there that needs to be filed as well.

Best of luck in getting this resolved.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.