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.
