2014 was the first year we saw customers receive IRS Letter 3853C (or even heard of this letter), informing them that the IRS will not be processing the Form 1120 U.S. Corporation Income Tax Return
OR will not be processing the Form 1120S U.S. Income Tax Return for an S Corporation
they filed (the letter may address either situation, depending on which form was originally filed). From what we have seen, these letters usually state the IRS at some point had received Form 2553 Election by a Small Business Corporation
, and based on what they are stating is the effective date of that election, that they are expecting to see the customer file the opposite form from that which they have already filed. There is no information we can locate on the IRS website regarding IRS Letter 3853C.
Since, in the past, the IRS has rejected electronically filed Forms 1120 or 1120S when Form 2553 has been filed and, based on the effective date, the opposite form should be filed, we would advise you to review the Form 2553 you filed, and the instructions for the form which outlines what the effective date of the election would be based upon when it was filed, to ensure the IRS letter is correct. CLICK HERE
to access the instructions for Form 2553. If you do not agree with the letter, you will want to contact the IRS and verify the letter was accurately generated and, if necessary, provide proof of when your corporation should be filing Form 1120 and when it should be filing Form 1120S. Depending on what is outlined in the letter you received, you may need to provide a copy of your statement of revocation or termination, if one had been filed, OR information if you qualify for relief under Revenue Procedure 2013-30. If applicable, those items would be explained further in the letter and there is also information available in the Form 2553 instructions. If you are a tax professional contact the IRS at 1-866-255-0654. If you are the taxpayer, contact the Business & Specialty Tax Line at 1-800-829-4933.
If you determine the IRS letter is correct, you would need to complete, as the letter instructs, either Form 1120 or 1120S and submit it to the IRS. If the IRS has already accepted a Form 1120 or 1120S filed under the EIN of the corporation, we do not believe they will accept another electronic filing with the same EIN (even if the return is now a different form), and so you would need to paper file the return.