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posted May 31, 2019 5:45:26 PM

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?

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

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1 Best answer
Level 13
May 31, 2019 5:45:30 PM

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.

3 Replies
Level 15
May 31, 2019 5:45:28 PM

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.

Level 13
May 31, 2019 5:45:30 PM

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.

Level 15
May 31, 2019 5:45:31 PM

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.