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taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1575
Experience:  Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Have question about filing extensions for corporations

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Have question about filing extensions for corporations operating as an S-Corp. Please review previous question to you before proceeding with the question:
Customer: replied 8 months ago.
First question is:
1.) TN,LLC company that was dissolved in March of 2017, form 966 was never completed as to date.
The dissolved company did not file a final return within 3 months after the dissolution.
a. What do I need to do?
b. What tax implications or penalties would be assessed?
2.) April 2017 I changed the name to OK, LLC but kept the same EIN as the TN,LLC that dissolved.
Issue: I cannot file an online extension for the same tax ID because the online software, says " EIN already exists for another Client."
Customer: replied 8 months ago.
Should I first file the extension with for the TN,LLC and then change the name on to the OK, LLC? Then File the extension for OK, LLC that has the same EIN?

Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

Please give me a few minutes to type my answer.

Did you formally adopt a plan of liquidation? Or did you as owner just move the company to OK?

IF you just moved the company to OK, and did so by dissolving the TN company, then there is NO Form 966 required. IF you read Internal Revenue Code (IRC) §6043(a), it states that a corporation must file this form AFTER A RESOLUTION TO LIQUIDATE has been adopted by the board. IF you did not pass such a resolution, then a strict reading of the IRC states that it is not required. So you do not need to do anything. There would be no penalties assessed.

Additionally, if you continued the same business, just in another state with a new corporation, then as far as the IRS is concerned there is no liquidation. Reorganization treatment is based on a long-standing IRS position that a liquidation of a corporation preceded or followed by a transfer to another corporation of all or part of the assets of the liquidating corporation could be recharacterized in accordance with its substance. [See, e.g.,Reg. §1.331-1(c). See also T.D. 9361, 2007-47 IRB, Oct. 24, 2007.]

So the IRS sees a liquidation followed closely by an incorporation/organization as ONE transaction, so the business continues.

You should not have obtained a new FEIN. You should have continued to use the old one (and you still can, if you have not filed the Form 966 or marked "Final" on the 2016 tax return).

I saw the answer from the first expert, and I believe (based on my knowledge of the law, a Masters in taxation, my teaching tax at the Masters' level for many years, and my 33+ years' experience) that the expert was wrong with his answer.

I hope this answers your questions. If you have any more, please lte meknow and I will be happy to answer.

Customer: replied 8 months ago.
Thank you for clarifying.
TN, LLC was dissolved at the state level in March 2017.
OK, LLC was then created with the same FEIN TN,LLC previously had- just a different state and different name.
Where I am running into an issue is: Both TN, LLC and OK, LLC need federal taxes filed by March 15th.
Do I need to file an extension for both if I am unable to meet the March 15th, 2018 deadline?Thank you for your professional expertise, years of knowledge, and your expert opinion.... citations etc. This is very helpful.
Customer: replied 8 months ago.
Do I need to file a name change form before filing? If OK,LLC is the same FEIN?
- Anything additional, I would need before filing an extension or before filing the corporate return?

Yes, I would file the name change ASAP. Then on the Extension mark the box for name change.

Oklahoma Tax Commission has administratively adopted the policy of honoring the automatic Federal extension, when no additional state tax is due, as an extension of time to file the Oklahoma return. When you file your Oklahoma return, simply attach a copy of the Federal extension.

Similarly, if you have a valid Federal extension (IRS Form 7004) and you owe zero state tax, you will automatically be granted a Tennessee tax extension.

So unless you will owe State tax, you only have to file the Federal extension.

Customer: replied 8 months ago.
Could you reference:
1. The Name change form? Link and form #.
2. OK State Tax link, can this be filed online?- for extension?
3. TN State Tax link, can this be filed online?- for extension?"
How would I file the 7004 extension if there are two names, and one FEIN?
- Two separate extensions for each name? or use TN,LLC and check box name change to OK, LLC?Thank you.

You only file a Federal extension for the current name. Don't worry about the prior name.

Also, you do not need to file OK or TN unless you think that you are going to owe tax. Since you said in the old question that the OK company was running based on a loan, there should be no tax liability for that. Similarly with TN. Also, a small balance due is allowed with both states.

Do you want a link for the section where it says that they accept Federal Extensions?

AS for notifying the IRS of the name change, they say that if the EIN was recently assigned and filing liability has yet to be determined, send Business Name Change requests to IRS-Stop 343, Cincinnati, OH 45999.

IF, as I suspect, the EIN was assigned several months ago, then you notify the IRS on the tax form that you file. For corporations, if you are filing a current year return, mark the appropriate name change box of the Form 1120 type you are using:

  • Form 1120: Page 1, Line E, Box 3
  • Form 1120S: Page 1, Line H, Box 2

If you have already filed your return for the current year, write to us at the address where you filed your return to inform us of the name change. In addition:

  • The notification must be signed by a corporate officer.

I said that I would notify them of the name change ASAP. You do so by filing the extension with the new name, followed by the return with the correct name.

It can take the IRS some time to change the name in their files. I have a corporation that is finally in its third year with the new name, and the electronically filed return was finally accepted (it was rejected for name/EIN mismatch in the two prior years). So it can take some patience.

taxmanrog and 2 other Tax Specialists are ready to help you
Customer: replied 8 months ago.
During 2017, also in the state OK, I filed to State filings to incorporate two more business that did not have any revenue. ( My ambitious thought was I would create a working physical business from the two FEIN's, but I did not)
I understand that I must file returns even though there was no revenue.
In the past, I have been an employee of TN,LLC and OK, LLC, and operated as an S-corp.
When filing the extension for the two other entities that did not have any revenue, what would be the best tax advantage and CPA filing costs in filing the 2 returns for 2017.
- Both no revenue
- Both no expenses
- Both no employees
- Both no checking accounts.
Similarly with the other Corporation, Oklahoma will accept a federal extension for these two entities as well.If you file it yourself, there is no issue. If you were to hire a CPA, there would be a minimum charge even if there was no revenue. For example the software I use charges me $80 for a federal return and $60 for State return. So you would be looking at probably $150 minimum from any CPA even if there was no income. Then, there is some administrative time for the processing of the return, because even with no income the forms still have to be filled out. So you were probably looking at 200 to $250 per company even with no income. At least that's what I would do it for.
Customer: replied 8 months ago.
Would those two entities be filed or extended with form 7004 for return form 1120? A simple LLC?
Customer: replied 8 months ago.
You stated above: "Oklahoma will accept a federal extension for these two entities as well"
Question.....Would those two entities your mentioned be filed or extended with form 7004 for return form 1120? A simple LLC?
You said a corporation in your original post. If it is a single member LLC, it is considered a disregarded entity and is included on Schedule C of your personal return. So your personal extension, form 4868, would extend the single member LLC return.