First year S-Corp extension efile issue

[Vityaba]

My client told me that he registered a new business in 2012 and filed 2553 to elect S-Corp treatment.

He asked me to file an extension. I e-filed it on March 15th and it gets rejected with a message something like this "the entity type selected should match IRS records..." meaning that it's not S-Corp in the IRS system

My client still wants to treat the corporation as S corp and I know we can file form 2553 with "FILED PURSUANT TO REV. PROC. 2003-43" on the top if it goes with the initial tax return.

A question - if we file 1120S with 2553 in May, will IRS fine $190/month/shareholder for filing the return late? Does anyone have experienced something like that?

[Lynn EA USTCP in Louisiana]

mail the extension with a copy of the efile rejection notice.

[Gail in Virginia]

And ask the client for a copy of the letter from IRS accepting his S status. I had the same error message on a return this year, and the client was actually able to bring in the copy of the letter. Did not let us e-file but we sent the paper return with a copy of the rejection and the letter. Hope that next year the e-file will work.

[kcjenkins]

The other option, if he can not come up with the letter, is to get the extension for it as a C Corp.

[joanmcq]

That's what I had to do for my first year S.