E-filing options for Amended 1120-S for tax year 2024

[sp1995]

IN the same exact Boat here. Were you able to figure this out? Were you able to file amended 1120S return or did you have to mail it (indeed IRS website says that you supposedly have to e-file an amendment)?

[M-MTax]

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@sp1995 wrote:

......(indeed IRS website says that you supposedly have to e-file an amendment)........

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Where?

Electronic Filing

S corporations can generally electronically file (e-file) Form 1120-S, related forms, schedules, statements, and attachments; Form 7004 (automatic extension of time to file); and Forms 940, 941, and 944 (employment tax returns). Form 1099 and other information returns can also be electronically filed. The option to e-file doesn't, however, apply to certain returns.

For returns filed on or after January 1, 2024, S corporations are required to e-file Form 1120-S if they file 10 or more returns of any type during the calendar year (including income tax, employment tax, excise tax, and information returns). See Regulations section 301.6037-2. However, these corporations can request a waiver of the electronic filing requirements.

Amended Return

To correct a previously filed Form 1120-S, file an amended Form 1120-S and check box H(4) on page 1. Attach a statement that identifies the line number of each amended item, the corrected amount or treatment of the item, and an explanation of the reasons for each change.

If the income, deductions, credits, or other information provided to any shareholder on Schedule K-1 or K-3 is incorrect, file an amended Schedule K-1 or K-3 (Form 1120-S) for that shareholder with the amended Form 1120-S. Also give a copy of the amended Schedule K-1 or K-3 to that shareholder. Check the “Amended K-1” or “Amended K-3” box at the top of the Schedule K-1 or K-3 to indicate that it is an amended Schedule K-1 or K-3.

A change to the corporation's federal return may affect its state return. This includes changes made as the result of an IRS examination. For more information, contact the state tax agency for the state(s) in which the corporation's return was filed.

https://www.irs.gov/instructions/i1120s#en_US_2024_publink11515kd0e1133

[rleaf]

Hi @sp1995 No, I wasn't able to figure it out. I still can't file the amended return through TurboTax, and my research is showing that the IRS wants all amendments come through the same channel as the original return. https://www.federalregister.gov/d/2023-03710/p-24

@PatriciaV It is time for TurboTax to step up its compliance efforts. We do have up to 3 years to file an amended return but we shouldn't have to wait that long. If we're forced to file through TurboTax, your company needs to step up and the fix needs to be prioritized.

[M-MTax]

There's a threshold for the mandatory electronic filing of those returns and it's 10 or more returns.

There does not appear to be anything in the Regs at the link your cited that would require the electronic filing of an amended 1120-S return after an original 1120-S was e-filed. If that is in error, please point to the specific section.

Regardless, TurboTax Business (again) will not allow a user to e-file an amended 1120-S after an original 1120-S was e-filed with the software.

[rleaf]

@M-MTax "The Treasury Department and the IRS have determined that, because of the disparate procedures for processing paper and electronic information returns, the corrected-return rule will increase the IRS's timeliness and accuracy in processing information returns, which will improve tax administration with respect to corrected returns. ... As discussed in this preamble, the changes to the information return electronic-filing rules, including the corrected-return rule, in this Treasury Decision will apply for returns required to be filed after December 31, 2023, which is after the launch of the Form 1099 filing platform."

[sp1995]

M-Mtax, I really appreciate your answer. It does clearly say that you can file a paper return.

Rleaf, this is exactly where all of our confusion stems from. Yes, it does look like a recent regulation starting with 2024 says that any PERSON even (not a corp) is supposed to file subsequent returns in a manner he filed the original one. Elsewhere, you can find that a corporation is required to e-file, if it files a total of more than 10 returns during a year (ANY returns). If you have any payroll, you will file forms 940, etc per quarter and that is already at least 8 and then a couple 1099 and you are over 10. Some place IRS says that it applies to large and mid-sized corporations, those that have more than $10M in assets, but elsewhere it says like you are citing any PERSON.

I also believe M-Mtax is right and this option of e-filing does not exist or does not work. I tried test e-file my 2023 return (the one that would definitely be processed by IRS by now) and TurboTax Business 2023 updated to the latest and NO, option to e-file does not work. I am assuming that it will not work for 2024 ever either.

Has anyone called IRS to figure this out?

I spoke with TurboTax rep and they told me to mail it in. Also, it is impossible to e-file manually. Not a chance. It is not for ordinary people. You has to generate an XML file, etc and you have to be granted access to upload it by IRS.

[sp1995]

The other only option would be to purchase software that CAN e-file amended return, figure out how it works and then file. This will be a massive amount of work/money and time and will delay ALL shareholder returns too. We need a plan B. TurboTax Business will not support e-filing amended returns in my opinion.

[M-MTax]

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@rleaf wrote:

... the IRS have determined that, because of the disparate procedures for processing paper and electronic information returns.........

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@rleaf 

Information returns:

These returns are the likes of Forms 1042-S, Form 1094 series, Form 1095-B, Form 1095-C, Form 1097-BTC, Form 1098, Form 1098-C, Form 1098-E, Form 1098-Q, Form 1098-T, Form 1099 series, et al.

Information returns do NOT include income tax returns, such as Form 1120-S.

[sp1995]

Also, the count supposedly includes W-2 and employment returns (940, 941). Anyone, will be over 10 filing threshold. 

[sp1995]

For better or worse IRS does contradict itself. M-Mtax is right that 2024 instruction for form 1120-S say in plain English that you have to e-file if you have more than 10 tax filings. OK. Down that document it DOES say that to amend a return file A PAPER copy.

For returns filed on or after January 1, 2024, S corporations are required to e-file Form 1120-S if they file 10 or more returns of any type during the calendar year (including income tax, employment tax, excise tax, and information returns).

Down these guidelines for 2024 it says:

To correct a previously filed Form 1120-S, file an amended Form 1120-S and check box H(4) on page 1. Attach a statement that identifies the line number of each amended item, the corrected amount or treatment of the item, and an explanation of the reasons for each change.

https://www.irs.gov/instructions/i1120s#en_US_2024_publink11515kd0e1133

The only confusion is with a separate guidelines (@rleaf) that say persons should amend returns in the same manner they filed original one.

[M-MTax]

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@sp1995 wrote:

The only confusion is with a separate guidelines (@rleaf) that say persons should amend returns in the same manner they filed original one.

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Correct and that's simply precatory language. There is a world of difference between "should" and "must".

[sp1995]

Unfortunately, I re-read it and it says must:

Proposed § 301.6011-2(c)(4)(ii)(A) provides that if a person is required to file original information returns electronically, that person must file any corresponding corrected information returns electronically.

The only option is down that paragraph:

The IRS will work with the tax-software community to encourage them to develop software options for corrections. If an intervening event or the cost to purchase electronic-filing software for corrected information returns would cause a filer undue hardship, the filer may request a waiver from the electronic-filing requirement for the corrected information returns.

https://www.federalregister.gov/d/2023-03710/p-22

How do we request a waiver??

[M-MTax]

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@sp1995 wrote:

Unfortunately, I re-read it and it says must:

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Unfortunately, you're clearly not a lawyer so you really should refrain from reading the law or regulations and then posting "your take" on the aforementioned.

See https://www.law.cornell.edu/cfr/text/26/301.6011-2

Once again, what you are citing refers to INFORMATION RETURNS, not income tax returns. The regulation is only applicable to the former, NOT the latter (or perhaps you do not understand the difference between the two).

[sp1995]

MASSIVE M-Mtax!

I finally understand what you were trying to say all along. Yes, income tax return (1120-S) is not considered an information return and falls out of that regulation scope. One more question for you (obviously Level 12 for a reason). 

Almost any change to 1120-S that is worth amending will change some reportable items (such as profit, etc.). This will trigger an updated Schedule K-1. I believe at this time that Schedule K-1 is an information return that would have been filed electronically, hence would have to be amended by e-filing,  no?

Very much appreciate your dropping knowledge. I have a simple goal of filing my tax return. Not claiming to be an expert.

[sp1995]

Just wanted to share a follow up on this. I did call IRS today. First I called their e-file desk  (866-255-0654). The person told me the same story that we have been repeating here. If you file more than 10 returns you have to e-file. I go through the reasons for us and she suggests either filing a waiver for e-file requirement or call business line at 800-829-4933.

Waiver is here: https://www.irs.gov/pub/irs-pdf/f8508.pdf

Note that it does not even have an option for requesting a waiver for 1120-S form. This waiver pertains to INFORMATION returns as has been pointed out by M-Mtax numerous times.

Then I called the business line and the person there said that it was ok to file paper amended return. Whether he knows all the complexities of this discussion I do not know. But that was the information.