I have a c corp but have been filing form 1040 Schedule C for years. How do you correct this? do you go back & fix prior years? What tax consequence would there be?

[concerned]

Would filing 1120 going forward with the real formation date on it trigger anything on the past returns that were filed on wrong forms?

[Critter]

Seek professional help with this situation ... if this is true (hard to believe the IRS hasn't sent you letters on this before now ) then the fix is not easy and the penalties you have incurred are significant.

[Rick19744 · Accepted solution]

As Critter indicated, you should seek professional help here.

Some items that will be discussed are as follows:

• What year was the C corporation formed?  Did you apply for and receive an EIN?
• Why did you choose the C corporation as the entity type?  There are many pros and cons of each entity type and you need to understand which entity type meets your needs.
• Do you want and / or do you need to be operating as a C corporation?
• How have you been paying yourself?  
• Have any of your customers filed 1099's for business transactions?  To whom were the payments made?  You personally or the C corporation?
• How have you represented your business to the public and your customers?

No need to respond to each of the above questions.  I just wanted to give you some idea of things that will need to be discussed with a professional and you can go in having given some of these questions some thought.

[Critter]

Excellent list ... if the OP came into my office these would be the questions I would ask.  Any pro they employ should ask the same & more ... if they don't find another person.  Look for a CPA or an EA that have experience with corporate returns.