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Old 07-10-2009, 05:03 PM
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S-Corp back-registration in NJ

We recently received a notice from the NJ Dept of Treas Div of Rev RE: classification issue NJ Corp Return 2008. The notice states that our S-corp which has been operating and filing taxes in NJ as an S-corp since 1878 was deemed never to be registered as S-corp in NJ. Thus NJ says the S-corp owes $100 penalty for every year since it began doing biz in NJ if it registers as an S-corp for every year since 1978.

Of course, we can’t find any record of any such registration with the state of NJ, after all, it would have been done in 1978.

However, when I called the phone # on the Notice, the woman indicated that the NJ tax code was changed in 1993/1994 requiring S-corps to register in NJ as S-corps in order to receive a more favorable tax rate than C-Corps.

We would like to know if this is the case. Because, if it is, the S-corp would only owe $100/year since 1993/1994, not 1978 – unless the registration requirement was grandfathered.

Also, what is the statute of limitations, if any, when NJ and/or PA tax authorities demand information and back-tax information older than 6 years? We got another notice from PA demanding taxes from a C-corp that was closed in 1992. And of course, we don’t have records that old. Our Accountant claimed their demand was past the state’s statute of limitations regarding collecting back taxes. But I was unable to find anything to confirm there is even a statute of limitations for these cases.

Thanks.



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