topic S corp filed Schedule C for its first year in Business & farm

S corp filed Schedule C for its first year

bsta822 — Mon, 03 Jun 2019 18:55:54 GMT

I open an LLC in 2015 and was approved by the IRS to be treated as s-corp, my CPA filed the company on schedule C instead of 1120 S, and I paid all the SE taxes on my personal filing.

in 2016 I used another CPA and he filed 1120 S.

my question is should I file 1120 S for 2015 and amend my 2015 personal filing or just leave it alone.

my theory is I have already paid more payroll taxes in schedule C and there was no prior filing for the s-corp so there will not be much of a "tax gap". Also if there will be any IRS penalties or fee, will my old CPA be held responsible?

I would appreciate your help and time.

This is one of those situations where, if there is no mat...

bwa — Mon, 03 Jun 2019 18:55:55 GMT

This is one of those situations where, if there is no material difference in tax, the best choice may be to let sleeping dogs lie. Amending your 2015 return and filing a delinquent 1120-S are going to cause both you and the IRS more trouble than it is worth, especially if there is no material amount of tax due.

Also if there will be any IRS penalties or fee, will my old CPA be held responsible?

You are responsible for any penalties on your return as presumably you knew that the Schedule C was incorrect and you filed the return anyway. However, if the CPA knew of the S-Corporation, most would correct their mistake at no additional cost to you.