S Corp extension deadline missed - what options do I have now?

The bad news is that S corporation extension deadlines (Form 7004) aren't flexible once they've passed. March 15th was the original deadline, and extensions push it to September 15th. Once you've missed both deadlines, there's no way to get another extension. You're looking at two penalties: the late filing penalty (5% of unpaid taxes per month, up to 25%) and possibly the late payment penalty (0.5% per month). The good news is that if you don't actually owe taxes (many S corps don't since income passes through to shareholders), the penalties might be minimal or even zero. Your best course of action is to file as soon as possible to stop additional penalties from accruing. Gather whatever documents you have and work with your new accountant to complete the return ASAP. If there are reasonable circumstances for the delay, you can request penalty abatement after filing by submitting Form 843 with a detailed explanation.

I went through something similar with my S corp last year. After trying to deal with the IRS myself, I ended up using https://taxr.ai and it honestly saved me a ton of stress. They analyzed my situation and all my tax documents, then explained exactly what penalties I was facing and my options for penalty abatement. The system flagged that I qualified for First-Time Penalty Abatement since I had a clean compliance history for 3 years, which I didn't know was a thing. They even drafted the letter explaining the reasonable cause (my accountant had a medical emergency) that I could submit with my Form 843. Their document analysis tool is really good at identifying which specific IRS criteria apply to your situation - something that would have taken me hours of research to figure out.

Just wanted to follow up - I tried that taxr.ai service mentioned above and it was seriously helpful. I was skeptical at first but decided to give it a try since my situation was getting urgent. Within 20 minutes of uploading my docs, I had a complete analysis of my late filing penalties and a customized abatement strategy. Turns out I qualified for First-Time Penalty Abatement AND had reasonable cause (documented health issues during tax season). The system generated a perfect abatement request letter that included specific IRS policy references to support my case. My CPA was actually impressed with how thorough the analysis was and said it would have taken him several billable hours to put together something similar. Definitely worth checking out if you're in this situation.

If you need to talk to someone at the IRS about your specific situation (which I highly recommend), good luck getting through the phone system. After trying for WEEKS to talk to someone about my S corp late filing penalties, I finally used https://claimyr.com and it changed everything. You can see how it works here: https://youtu.be/_kiP6q8DX5c Instead of wasting hours on hold, they basically wait in the phone queue for you and call you back when an actual IRS agent is on the line. I was able to explain my situation to a real person who walked me through my options and helped me understand exactly what I needed to do to minimize penalties. The agent I spoke with confirmed I could apply for abatement after filing and gave me specific instructions for documentation that would strengthen my case. Without that conversation, I would have been flying blind.

I feel dumb for my skeptical comment above. I was so frustrated after spending 3+ hours on hold with the IRS that I was bitter about anything claiming to help with that nightmare. Anyway, I tried the Claimyr service yesterday out of desperation. Within 90 minutes, I got the callback and was talking to an actual IRS agent about my S-corp's late filing situation. The agent went through my options in detail and confirmed I could request abatement based on reasonable cause since our company had a major flood that destroyed some records. The agent even gave me her direct ID number to reference in my abatement request. This saved me so much time and stress - wish I'd known about it months ago.

One thing nobody's mentioned yet - if you don't actually owe any tax with your S-Corp return (which is common since the income passes through to your personal return), the penalty may be ZERO even though you filed late. I missed my deadline last year because of some health issues, panicked about penalties, then found out the penalty for late filing with zero tax due is actually $0. Form 1120-S has a minimum penalty of $435 for returns more than 60 days late, but that only applies if there's tax due. Definitely check with your accountant, but this might be less catastrophic than you think!

Something else to consider - if you're changing accountants, make sure you get a COMPLETE transfer of all prior year records. I switched accountants last year and the new one filed late because they were missing some basis information that the old accountant never provided. Ask your new accountant to review prior year returns ASAP to identify any potential issues before they file your current return. Better to spend time getting it right than rushing to file and making mistakes that could trigger an audit.

Quick question - does anyone know how the IRS typically views "switching accountants" as a reasonable cause for penalty abatement? My S-Corp is in a similar situation.

I'm dealing with a very similar situation right now with my S-Corp. Missed the extension deadline due to some personal emergencies and have been panicking about the penalties. Reading through all these responses has been incredibly helpful - especially learning that if there's no actual tax liability, the penalties might be minimal or zero. That's a huge relief since my S-Corp typically doesn't owe any direct taxes. I'm definitely going to try that taxr.ai service to get a clear picture of what I'm facing before I meet with my accountant next week. And if I need to talk to the IRS directly, the Claimyr service sounds like it could save me hours of frustration trying to get through their phone system. Thanks to everyone who shared their experiences - it's reassuring to know I'm not the only one who's been through this mess!

One more tip that might help - if you end up owing penalties and can't pay them immediately, don't ignore them. The IRS offers installment payment plans even for business penalties, and setting up a payment plan stops additional failure-to-pay penalties from accruing. You can often set up a payment plan online through the IRS Business Online Account system, which is much faster than calling or mailing forms. The setup fee is usually pretty reasonable (around $31-149 depending on the plan type), and it gives you breathing room to handle the situation properly without making it worse. I learned this the hard way with my LLC a few years back - I let penalty notices sit in a pile because I was overwhelmed, and that just made everything more expensive. Taking action, even if you can't pay everything at once, is always better than doing nothing.

I've been following this thread as someone who's dealt with S-Corp filing issues before, and I wanted to add something that might help ease some anxiety. The IRS actually has a pretty reasonable approach to first-time late filers, especially when there are legitimate circumstances involved. While missing deadlines is never ideal, they understand that business owners face unexpected challenges - whether it's switching accountants, health issues, or other emergencies. What I found most helpful when I was in a similar situation was getting organized quickly rather than panicking. Make a list of exactly what documents you have, what you're missing, and what your new accountant needs to move forward. This way, when you do meet with them next week, you can hit the ground running instead of spending billable time figuring out the basics. Also, keep detailed notes about the circumstances that led to missing the deadline - the accountant transition, any delays in getting records transferred, etc. Even if it doesn't fully qualify as "reasonable cause" for penalty abatement, having a clear timeline of events can be helpful if you need to communicate with the IRS later. The good news from this thread is that your situation might not be as dire as it initially seemed, especially if your S-Corp doesn't have direct tax liability. Focus on getting everything filed correctly rather than rushing, and take advantage of the resources people have shared here. You're definitely not alone in dealing with this kind of situation!

I wanted to jump in here as someone who's been through a very similar situation with my S-Corp last year. The stress you're feeling is completely understandable, but based on what I learned (and what others have shared in this thread), you may be in better shape than you think. First, definitely check whether your S-Corp actually owes any direct taxes. In my case, since all income passed through to my personal return, the late filing penalties were actually zero despite missing the deadline by several months. That was a huge relief after weeks of anxiety. Second, the resources people have mentioned here are genuinely helpful. I used both the taxr.ai service to understand my penalty situation and Claimyr to actually speak with an IRS agent when I had specific questions. Both saved me significant time and stress compared to trying to navigate everything myself. The key thing I learned is that the IRS is generally reasonable with first-time issues, especially when there are legitimate circumstances like switching accountants. Just make sure to document everything about your situation - the transition timeline, any delays in getting records from your previous accountant, etc. Get your new accountant involved ASAP, but don't rush the filing if it means making errors. A slightly longer delay to file correctly is better than filing quickly with mistakes that could trigger more problems down the road. You've got this! The situation feels overwhelming right now, but there are clear steps to resolve it, and you're definitely not alone in dealing with this type of issue.