Ask TaxMama ... S-Corp Mix-Up ... March 15, 2003

Ask TaxMama.Com
Tax Information With A Mother's Touch

Published by Eva Rosenberg, MBA, EA


	Policing The Chief
	Sales Tax
	S-Corp Mix-Up
	Graduate School
	I Filed, I Owe
	Extension to File, NOT to Pay
	Doesn't It End With Bankruptcy?


	New Form to Report Suspicious Activity
	Beware of Scams, Unscrupulous Preparers


	When Osama Died

E-Mail
This Page To A Friend

Your email:

Your name:

TO email:

S-Corp Mix-Up

» From: Sparta, NJ

Dear TaxMama:

I paid a filing company to register an s-corp for me back in 1997.

I filed returns back in 97 & 98 and just got a letter from NJ claiming that since I am a C corp i owe them $7000 for 1997.

I since found out that the company failed to register me as an S-corp in NJ.

My question is - since I was not notified earlier, hasn't the statute of limitation run out for the money due from 1997?

Why wouldn't they let me know sooner, before the tax and penalties added up?

Please help.

Thanks.

Rob

Dear Rob,

I am not familiar with the corporate rules in NJ. And I truly don't have any idea why it took them THIS long to get to you.

But, if you didn't file the C-Corporation return, and should have, there's no statute of limitation on a form you didn't file.

But, first, have you talked to them?

Many states will follow IRS's rules. And IRS has a special provision for people who had intended to be an S-Corp, but didn't do the paperwork properly. Look at the instructions for IRS's S-Corporation Election, Form 2553.

Go to the bottom of the first column on page2 and the top of the second column. See where it says to write FILED PURSUANT TO REV. PROC. 98-55' on top of your form?

Well, find the correct form for the state of New Jersey. Fill it out.

On the top, write FILED PURSUANT TO REV. PROC. 98-55'

See if they will accept it.

If not ... ask them to work with you. Or get a good local tax professional who knows how to combat this. No doubt, there is a way.

Just a note about companies that incorporate you.

NONE of them seem to take care of filing for your S-Corporation status. They cant. You and your shareholders must sign those forms yourself. They can't sign them for you.

The incorporators typically provide you with the forms to fill out and sign. And it's up to YOU to get them in within the deadlines for IRS and state, after you've opened up your busiiness. (By the 15TH day of the third month after you incorporate.)

Incidentally, I will alert you (and know that I will get lots of mail from attorneys disagreeing with me, but) I have rarely seen an attorney, when setting up a corporation, who remembered to file the S-Corporation elections. (The form to let them know you want to be an S-Corp.)

Good luck!

Best wishes,

Eva Rosenberg
Your TaxMama

Bring Humor to your working life - I-Laugh

Click Here
to
Subscribe
to the
Internet's
Help Desk

Turn your favorite photo into a painting on canvas - Photo Masterpieces

Print a printer friendly version of this issue

Certain graphics on this site were created especially for TaxMama by Serenata of Serenata Design. Site design & maintenance by Serenata Design.