I have an s-corporation that is a fiscal year entity ending 09-30.

Their 09-30-2012 year end has been extended and isn’t finished yet.

I plan to revoke their fiscal year election in 2012 meaning they’ll have to file a short “calendar year” 2012 corporate return.

I’ve attempted to extend that short calendar year return by electronically filing form 7004.

It was rejected because IRS thinks they’re on a fiscal year.

I now plan to mail the extension with an attachment explaining the situation.

Is there a better way to handle this?

“I have an s-corporation that is a fiscal year entity ending 09-30.Their 09-30-2012 year end has been extended and isn’t finished yet.” “I plan to revoke their fiscal year election in 2012 meaning they’ll have to file a short “calendar year” 2012 corporate return.I’ve attempted to extend that short calendar year return by electronically filing form 7004.It was rejected because IRS thinks they’re on a fiscal year.”===== Under pre-1983 law, an S corp was allowed to select any fiscal year. Because of perceived abuses, current law requires that an S corp generally be on a calendar year; however, an S corp may adopt any fiscal year as long as An S corp may adopt any FY end if it can establish that there is a business purpose for that fiscal year; and an S corp may elect a fiscal year that does not defer income for the shorter of three months, or the deferral period of the tax year from which the corporation is changing. Under the provisions of section 444, an S corp can elect to have a tax year other than a required year, but only if the deferral period of the tax year is not longer than the shorter of 3 months or the deferral period of the tax year being changed. This election is made by filing Form 8716, Election To Have a Tax Year Other Than a Required Tax Year. Thus, a new S corp may elect a fiscal year ending in September, October or November. A section 444 election ends if an S corporation changes its accounting period to a calendar year or some other permitted year. If the termination results in a short tax year, enter at the top of the first page of Form 1120S for the short tax year, “SECTION 444 ELECTION TERMINATED.”



“I now plan to mail the extension with an attachment explaining the situation.Is there a better way to handle this?=========Basically, all changes in a company's year-end must occur for a business purpose; the change of year-end is applied for on IRS Form 1128, which must be filed on or before the 15th day of the second calendar month following the close of the short period resulting from the desired change.However, form 1128 is not required if you are terminating an existing Sec. 444 election.I guess this is your situation. On the other hand, if the S corp was on a fiscal year and did not have a 444 election, then you are using the correct procedure)( I mean you need to file form 1128). OR there is a possibility: they may not have a 444 election, just using the wrong year. and the IRS May have never caught on to it. I guess, NOT sure .When a taxpayer changes its year-end, it will have to file a separate tax return for the short period resulting from the change in addition to the new year-end period. For instance, if a taxpayer changes from a Sep year-end to a December year-end, it must file a return for the period Oct to December in addition to the return it filed for the previous Oct through Sep. As a result, a taxpayer will have to file two returns in less than twelve months. Subsequent returns will cover twelve months of activity (or 52-53 weeks, if appropriate).I guess you need to contact the IRS for more info in detail.

Thank you for your reply, Wnhough.

However, I think I have found the answer with your help.

The corp did have an existing 444 election of which they want to revoke starting 10/01/2012.

To extend the resulting short year end, form 7004 is to be filed and under Part III, Line 5.a. should contain the correct date range. Also, the checkbox next to "Change in Accounting Period" under Line 5.b. should be checked.

I attempted to e-file this form and it was still rejected by the IRS. Therefore, I will file it manually with an explanatory letter.

I attempted to e-file this form and it was still rejected by the IRS. Therefore, I will file it manually with an explanatory letter.’=================aseyou can see, Form 7004 can be e-filed; All the returns shown on Form 7004 are eligible for an automatic extension of time to file from the due date of the return. The Form 7004 does not extend the time for payment of tax.I GUESS . you tried to efile form 7004 Extension, but it is getting rejected because the business acct period is stillon a FY as you said;you may paper file the extension.For your state, as you are only requesting an accounting period change with your state, then you must send the Federal Form 1128 along with a cover letter stating what is being done and why you are changing your accounting period to yur stat Dept of Rev. In most cases, you must file a short-period return when you change your accounting period.You can contact yur state Dept of Rev for more info in detail.

Got it. Thanks so much.

In general, as you can see, Biz Tax Extension Form 7004 must be filed by March 15,I mean as long as your Sc orp is a calendar year basis, and once it is processed by the IRS, you will be granted an automatic 5 or 6 month tax extension depending on the biz type.. Certain Partnerships, Trusts, and Estates are only able to apply for a 5 month tax extension; this is determined by which tax form they would be filing for their return. Business Extension Form 7004 is due by March 15 or by 15th of third month. You can extend your IRS income tax deadline using Express Extension by electronically filing IRS Business Tax Extension Form 7004. This will extend the filing deadline to either 5 or 6 months. You can get it done in a matter of minutes. If your Form 7004 get rejected (not many do), IRS'll tell you why. You can call the IRS e-Help Desk at 1-866-255-065 for more accurate info.Good lcuk~~