What This Notice Means
A Section 444 election lets a partnership or S corporation file its business return (Form 1065 or Form 1120-S) on a fiscal year instead of the calendar year. Keeping that election requires filing Form 8752, Required Payment or Refund Under Section 7519, every year.
CP286D says the IRS terminated your Section 444 election because you didn't file Form 8752 annually as required. If you are still in business, you must now file Form 1065 or Form 1120-S on a calendar year.
What to Do
- Switch to a calendar year. Prepare and file your business return on a calendar year basis.
- Claim any Form 8752 credit. If you have a credit balance from Form 8752 payments, you must file a final Form 8752 to claim your refund.
- Tell your return preparer right away so the next return is filed on the right year.
Why This Matters
Once the election is terminated, a Form 1065 or Form 1120-S filed on a fiscal year will be rejected and won't be considered filed. An unfiled business return can lead to late filing penalties, including penalties that apply per partner or per shareholder.
If You Disagree
If you did file Form 8752 each year, send supporting documentation showing your Forms 8752 were filed, along with a copy of the notice, to the address on the notice. Proof of filing, such as certified mail receipts or IRS acknowledgments, is the strongest evidence. Keep copies of everything you send.
If your fiscal year election was terminated and you need to sort out your filings, call us at (813) 229-7100.