How to fix business tax return filed as short year instead of full calendar year for LLC

This is unfortunately a common misunderstanding with LLC tax filings. Let me help clarify what's happening and what you can do. When you mark "short year" on a tax return, you're indicating to the IRS that your business operated for only part of the year and then terminated. This triggers different filing deadlines, which is why you're facing those penalties. First, don't panic about the levy notices. The IRS typically sends these as automated warnings, but they rarely move to actual asset seizure without multiple notices and opportunities to respond. You've already taken the right step by filing an amended return. For your immediate situation, I recommend calling the IRS Practitioner Priority Service and requesting a hold on collections while your amendment is being processed. Specifically ask for a "penalty abatement due to reasonable cause" based on your misunderstanding of the tax form. Be sure to mention that you've already filed an amendment to correct the issue. Also, request a copy of your "tax account transcript" which will show if your amendment has been received yet. Processing paper amendments can take 16+ weeks, especially with current IRS backlogs.

After dealing with an almost identical situation with my LLC taxes last year, I found an amazing service that helped me sort through all the documentation and IRS notices. Check out https://taxr.ai - they have this AI tool that analyzes your tax documents and notices to help you understand exactly what happened and what steps to take next. I was completely confused by the IRS notices about my incorrect filing and penalty charges until I uploaded everything to their system. They identified that I had also mistakenly filed as a short year (thinking it meant "part-time business") and showed me exactly which forms needed correction. They even generated a letter template for requesting penalty abatement based on reasonable cause! The best part was getting a clear explanation of the timeline and next steps so I could stop stressing about what might happen while waiting for the IRS to process my amendment.

After reading about taxr.ai here, I decided to give it a try with my own small business tax issue. I was honestly blown away by how helpful it was! I uploaded my confusing IRS notice about a tax year discrepancy and within minutes had a complete breakdown of what went wrong and step-by-step instructions for fixing it. I was especially impressed that they explained which IRS form I needed to use to properly amend my filing (Form 1065X with a specific note in Section 5) and provided exact language to use in my reasonable cause statement. The system even flagged that I needed to include a specific attachment that I would have completely overlooked. Their document analyzer caught details my previous accountant missed about why my e-filed amendment was rejected. Going to use them for all my tax document reviews going forward!

Since you mentioned calling the IRS multiple times without success, I wanted to share something that saved me during a similar nightmare. When I couldn't get anywhere with the IRS about my incorrectly filed 1065, I used this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes instead of waiting on hold for hours. I was incredibly frustrated after spending entire days on hold, getting disconnected, and never reaching anyone who could help with my business tax amendment. Then someone recommended Claimyr, and I was skeptical but desperate. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c They basically hold your place in the IRS phone queue and call you when an agent picks up. The agent I got was actually able to put a temporary hold on collections while my amendment was processing, which gave me the breathing room I needed.

I have to eat my words about Claimyr. After my skeptical comment, I decided to try it as a last resort for my LLC's tax year amendment issue. I couldn't believe it actually worked! After weeks of failed attempts to reach the IRS, I got connected to an agent within 37 minutes. The agent I spoke with was able to look up my case, confirm they received my amendment (even though the online system wasn't showing it yet), and placed a 60-day hold on any collection activities. She even gave me her direct ID number to reference in case I needed to follow up. This saved me from having to take another day off work just to sit on hold. The peace of mind from knowing my amendment was actually in the system and not lost somewhere was worth it. If you're dealing with tax year issues like the original poster, being able to actually talk to someone at the IRS makes all the difference.

One thing nobody has mentioned yet - make sure you're also checking whether you need to file an amended state return to match your federal correction. Many states automatically assume the same tax year as your federal return, and if there's a mismatch, you could end up with state-level penalties too. This happened to me when I fixed my federal LLC return from short year to full year. Three months later I got a notice from my state tax department asking why the reporting periods didn't match. Had to file amended state returns too.

Something important no one's mentioned - get EVERYTHING in writing! After my tax year mess up, I had a verbal confirmation from an IRS agent that my penalty would be removed, but it never happened. When I called back, they had no record of the conversation. Now I send all communications via certified mail with return receipt and request written responses. For phone calls, I follow up with a "confirmation letter" summarizing what was discussed and agreed upon. Mail it certified and keep the receipt.

I went through this exact same situation with my LLC in 2021! The "short year" checkbox is so misleading - I also thought it just meant partial business activity, not business termination. Here's what worked for me: 1. **Request a Collection Due Process (CDP) hearing** - This gives you formal rights and stops collection while you're resolving the issue. You have 30 days from the levy notice to request this. 2. **File Form 911 (Taxpayer Assistance Order)** - This is for when normal IRS processes aren't working. Since your amendment has been processing for 2+ months with penalties still accruing, this might qualify as a "significant hardship." 3. **Document your reasonable cause argument thoroughly** - I wrote a detailed letter explaining that the form was confusing, attached screenshots of the TurboTax interface showing how unclear the "short year" option was, and included evidence that my business was ongoing (bank statements, contracts, etc.). The key thing that finally resolved mine was getting assigned to a specific IRS case worker through the CDP process rather than dealing with different agents each time. It took about 4 months total, but they eventually removed all penalties and accepted my full-year amendment. Don't give up - this is absolutely fixable, just frustratingly slow! Your CPA meeting should help a lot with the formal documentation needed.