Personal Investments • Form 966 Advice for S-Corp Shutdown Screw up

For tax year 2022, I filed a 1120-S and marked the return as Final. I did not file a 966 at that time because I mistakenly didn't read the form to know I had 30 days since the resolution to shut down to file the 966 form. To top things, I had some I-bonds in the S-Corp that were in the process of being transferred to my personal T-direct account. I technically should have waited until this final asset was distributed to file the final return, but I was not aware this would trigger a taxable event. So the S-Corp received a 1099 for around $800 of interest for tax year 2023. I asked my accountant did I need to file another return for 2023, and if so what to do about the previous return being marked final. He suggested to leave the corp as is and report the interest to myself as a nominee from corp. He said IRS may issue a notice about not reporting on the corp, but I can respond to notice stating it was reported on personal. At the time we had that interaction, I hadn't realized I was probably late in filing the 966 form. I'm reading now if the 966 is not filed within 30 days, I could be fined. I'm completely confused about what to do at this point and I have been calling the IRS business number and have been unable to connect to someone who can help. Maybe I should just file a second final return for 2023 to report the interest, and file the 966 with it?

I frankly don't understand how anyone would be able to file the 966 within 30 days of resolving to shut down anyway. The form asks you for the date of the final return. A corporation filing a final return would have to had resolved to shut down the S-corp well in advance of being able to file a final return as it requires doing many things -- distributing assets, shutting down bank accounts, etc.

Statistics: Posted by catchinup — Sun Feb 11, 2024 9:37 pm — Replies 0 — Views 120

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