The correct thing to do would be to file an S corporation return and report the income. However, if you reported the dividend income on the personal tax return of the shareholder(s) to which it belongs, that may be an acceptable work-around solution. Also, you need to keep in mind there is a $220 per month penalty for late filing of an S Corporation return K-1 schedule, so the safe thing to do would be to file the S Corporation return.
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