S Corp dissolution

[Andoverlady116]

If an S corp has been involuntarily dissolved by the state can I still file an 1120 S, what happens if I do?

[M-MTax]

File an 1120-S and mark it as final.

[Andoverlady116]

The problem is my husband has been filing an 1120 S every year and Corp was involuntarily dissolved by SOC office in 2012. Will we get in trouble?  Does the Mass Secretary of State notify the IRS?

[M-MTax]

If the corp was dissolved in 2012 and the MA SoS made it a practice to notify the IRS you would have heard from them a long time ago. Best thing now would be to see a tax pro but probably file a final 1120-S and be done with the whole thing.

[Andoverlady116]

Thank you,  a friend told me that the IRS wouldn't accept an 1120-S from a company that was no longer an S corp but I guess that's not true?

[M-MTax]

As long as the S corp election is in effect they should accept a return. The fact that your husband has been able to file for years after the corp was dissolved is sort of proof of that......but the IRS should not have accepted ANY corp return since the corp was dissolved. So at this time it would probably be wise to file a final return and be done with it......I'd check with a local tax pro first because there are probably state filings to consider.

[Critter-3]

This is an instance of the tail wagging the dog ...  the state cannot dictate what the feds do.   The real question is what have you been doing all these years since the state administratively dissolved the corp (most likely for not paying the annual registration fee ... happens in FL all the time ... this way they can charge you a big reinstatement fee) ?

The IRS expects an 1120-S every year until you file a final return.   Seek local professional assistance if you are behind in the federal filings as the late filing penalties are continuing to amass at a rate of at least $2400 per year.  

[Mike9241]

if the company has been conducting operations it could face legal issues.  in addition, if it's no longer a corporation because of state dissolution, can it still file an S-Corp return? You should consult your attorney to find out how the dissolution affects the business.

[Critter-3]

If you have been filed a federal return every year then what have you been doing for a state return since 2012?

I would be more worried about the state getting after you.   This is a mess at best ... seek local assistance to clean this up. 

[Andoverlady116]

He has continued to file an 1120 S every year but is that acceptable if the corporation has been dissolved?  Would we be looking at annual fines of $2400?

[Critter-3]

Ok ... if you have been timely filing the federal 1120S form then there are no federal penalties however what have you been doing for the state return ?   Was a state return even  required ?   What state is the business registered in ?   

[Andoverlady116]

Returns have been filed in Massachusetts as an s corporation but the state had dissolved the s corporation status 

[Critter-3]

That  is weird ... the state dissolved the corp but still accepts returns for it ???  Something is not adding up so  Talk to the state to get to the bottom of this situation.  

[Critter-3]

Ok ... so MA  does the same thing as FL  ... there is a mandatory annual fee and failure to pay it will close the company.  But if you have been filing annual returns I am very surprised they have not contacted you to catch up on the annual fee ... again call the state to see what needs to be done if anything.

What is an involuntary dissolution of a corporation in Massachusetts?

Massachusetts involuntary dissolution of corporation

Your corporation is registered with the State of Massachusetts. ... While a corporation may be involuntarily dissolved through a court decree, or for administrative reasons such as failing to file annual reports or pay taxes, this article covers voluntary dissolution by a corporation's shareholders.

https://www.nolo.com/legal-encyclopedia/how-dissolve-corporation-massachusetts.html#:~:text=Your%20c....