Amending 1120S form - What explanations are needed for all the changes?

When amending an 1120S, you generally need to provide clear explanations for the primary changes that initiated the amendment, not necessarily for every resulting change. Focus on explaining the substantive changes - in your case, the officer compensation and distribution amount modifications. These are the root changes that caused the "ripple effects." On Form 8982 (which you'll need to include with your amended return), there's a section specifically for explaining the reasons for the amendment. For the actual 1120S and Schedule K changes, provide a concise explanation of what changed and why. You don't need to separately explain each corresponding change to the K-1s, Statement A, etc. if they're simply mathematical results of the primary changes. The IRS understands that changing one number often affects multiple forms and schedules. That said, if any of the K-1 changes involve special allocations or unusual items that aren't obvious flow-through consequences, those should be explained separately.

I went through something similar last year with my S-Corp and wasted so much time trying to figure out all the explanations! I eventually found this tool at https://taxr.ai that saved me HOURS of work. It basically analyzes your tax documents and tells you exactly what explanations you need for amendments. I uploaded my original 1120S and the amended version, and it highlighted every change and even auto-generated the explanations I needed. It specifically identified which changes were "primary" vs just flow-through effects, so I didn't have to explain the same thing multiple times. The best part was that it formatted everything properly for submission with Form 8982. My CPA was actually impressed with how thorough and correct the explanations were!

I was pretty skeptical about using a tool to help with my amended 1120S (see my comment above), but I gave https://taxr.ai a try after struggling with an amendment for my consulting business. I was really surprised by how well it worked. The tool spotted that my distribution changes affected multiple forms but helped me create one clear explanation that covered everything. It actually pointed out a calculation error I missed that would have caused problems. The best feature was how it showed me exactly which changes needed explanations versus which were just automatic flow-through effects. Saved me from writing redundant explanations and potentially confusing the IRS reviewers. My amendment was processed without any issues or follow-up questions. Much better than my previous experience when I tried to explain everything manually and got a clarification request from the IRS!

If you're amending an 1120S and having trouble reaching the IRS for guidance, I highly recommend using Claimyr (https://claimyr.com). I spent DAYS trying to get through to someone at the IRS about my S-Corp amendment questions last quarter and kept hitting the "call volume too high" message. Claimyr actually got me connected to an IRS agent in about 17 minutes when I'd been trying for weeks. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c The agent confirmed that I only needed to explain the primary changes (in my case, some misclassified expenses and understated income) and not every single resulting change to all the forms. She even emailed me sample language to use for the explanation, which was super helpful. Definitely worth it when you need clarification directly from the IRS!

I take back what I said about Claimyr being BS. After my frustrated comment above, I decided to try it out of desperation because I was getting nowhere with the IRS about my business amendment questions. I was connected to an IRS business tax specialist in 23 minutes after trying for literally months on my own. The agent clarified that for my 1120S amendment, I only needed to explain the primary changes that led to the amendment, not every calculated result throughout the forms. She confirmed that a single clear explanation attached to Form 8982 was sufficient as long as I referenced all the affected forms. She also looked up my previous submission and confirmed it was still in processing. Actually getting to talk to someone made a huge difference in my confidence about the amendment I submitted.

Another tip for 1120S amendments - make sure you're using the correct version of Form 8982 (the X form for 1120S). I made that mistake last year and had my amendment rejected because I used the wrong revision year. For explanations, one thing that helped me was creating a simple table showing: 1) What changed (specific line items) 2) Original amount 3) Corrected amount 4) Brief reason This made it super clear for the IRS and I had no issues with my amendment. The key is being organized and precise rather than writing lengthy explanations.

Has anyone used ProSeries to prepare their amended 1120S? I'm having issues with the software not carrying over all the changes correctly to the K-1s.

I went through this exact situation with my S-Corp amendment last year. Based on my experience and what my CPA advised, you really only need to provide detailed explanations for the primary changes that triggered the amendment - the officer compensation and distribution adjustments in your case. Here's what worked for me: I created a concise explanation on Form 8982 that identified the specific line items that changed, the original vs. corrected amounts, and a brief reason (like "correction of officer compensation calculation error"). I didn't explain every single cascading change because those are mathematical consequences that the IRS expects. The key is being clear about what you're correcting and why, without over-explaining the obvious flow-through effects. My amendment was processed smoothly with no follow-up questions. Focus your energy on accuracy rather than excessive documentation - the IRS can see all the before/after numbers on the forms themselves.

Great question about processing times and K-1s! My amendment took about 12 weeks to process, though I've heard times can vary quite a bit depending on IRS workload. You'll get a letter acknowledging receipt within a few weeks, then the actual processing notice later. For the K-1s, you absolutely need to send amended K-1s to all shareholders yourself - the IRS doesn't handle that notification. Make sure to clearly mark them as "AMENDED" and include a brief explanation of what changed. Your shareholders will then need to amend their personal returns if the changes affect their tax liability. Pro tip: Send the amended K-1s certified mail so you have proof of delivery. Some of my shareholders had questions about how the changes affected their returns, so be prepared to explain the modifications if they reach out.

I'm dealing with a similar amendment situation right now and this thread has been incredibly helpful! One thing I wanted to add based on my research - if your officer compensation changes result in payroll tax adjustments, you'll also need to file Form 941X to correct the employment taxes. The IRS wants consistency between your 1120S amendment and your payroll tax filings, so make sure you're addressing both sides if applicable. I learned this the hard way when I got a notice asking for clarification about the discrepancy between my amended S-Corp return and my original 941 filings. Also, if you're using tax software, double-check that it's properly calculating the impact on your shareholders' basis - I caught an error where the software didn't correctly flow the distribution changes through to the basis calculations on the K-1s, which would have caused issues for my shareholders when they amended their personal returns.