# IRS: Non-filing Penalty



## miky348 (Sep 23, 2010)

Hi,

I opened a corporation in 2012. On the same day, elected as "S-Corp" (form-2553).

The company has never had any activity except opening of bank account and depositing funds in it. I never filed a tax return due to non-activity.

Received a notice from IRS to file return within 30 days. Upon calling IRS found out that return is mandatory (even if no activity). Plus a penalty of $195/director/annum for late filing ($9,360/-)

How to avoid/minimize this penalty? I don't mind even closing the corporation.

Thanks
Miky


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## Bevdeforges (Nov 16, 2007)

If you opened an S-corp, that means that you are a US citizen and thus should have been filing your personal income taxes. Apparently what the IRS is demanding is the 1120S filing by the corporation, which is the document that notifies the shareholders what amount of income from the S Corp to include on their personal income tax forms.

I'm not sure there is any way for you to get out of the penalty for failure to file the S Corp filing. It's kind of like a regular corporation failing to file W-2s or 1099s - it's not that the corporation owes any tax, but the shareholders need that filing to justify their not declaring any income or loss from the S Corp.
Cheers,
Bev


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## KristenJune (Oct 8, 2016)

miky348 said:


> Hi,
> 
> I opened a corporation in 2012. On the same day, elected as "S-Corp" (form-2553).
> 
> ...


Did you update annual records of the corporation to the State? If not your company may have been dissolved. Don't know if that would help your cause but if the company was dissolved in year x would you still have to pay penalties for subsequent years?
I am not a CPA, just curious. Good luck.


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