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If a US corporation started a nonprofit, 501(c(3), but

missed the deadline to file...
If a US corporation started a nonprofit, 501(c(3), but missed the deadline to file Form 1023 to apply for nonprofit status, and if they do not intend to ever file the Form 1023 because they will not qualify, should they refile their initial Form 990 as a Form 1120?
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Answered in 15 minutes by:
10/18/2017
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,894
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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HI, MY NAME’S LANE - I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice 1986.

...

That's exactly right. First you'll need to amend the 990 to a null (all zero) return. There is no 990X. To indicate that a form is amended, check the ""Amended Return"" box in item B of the Heading on page 1 of the return form followed by entering in Schedule O which parts and schedules were amended and descriptions of each amendment.

...

You can simply say what you've said here, as the explanation, and say that you are submitting a form 1120 for the organization for the period in question.

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Please let me know if you have ANY questions at all

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating, using the stars on your screen, and then clicking “submit" – That’s the only way I’ll be credited for the work.

...

But if you need more on this, please let me know.

Lane

Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,894
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Customer reply replied 10 months ago
Hi Lane,
FYI, I spoke to the nonprofit section of the IRS and they indicated no amended 990 was needed. They said if client merely files an 1120 for the same period with a footnote explaining what happened, that would be sufficient. I know the IRS is not always accurate but I wanted to let you know. Note that I am a CPA who has been providing tax advice since 1978.

Appreciate that. My experience has always been (and the IRS counsel that I've worked with in the past have indicated that filed returns don't just disappear. The system expects one of two things; ANOTHER return the following year or an amended return showing that the return was final.

...

Have handles many of these situations this way and never had an issue. This could, however, be specific to non-profits. (stemming from the number that do exactly what's happened here, and nature of the the beast, that no -profit status has to be granted)

...

I WOULD submit that had you done it that way, it would have stood AND ensured no further questions.

...

We'll just have to wait and see if this is one of those questions where one IRS person says one thing and another eventually says something different. I'd sure get employee numbers in a file.

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(sorry for the typos - we can't edit after you've rated)

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