March 15 comes early, and missing it is priced per shareholder per month — tax due or not. Here's the math, and the near-automatic removal most owners never request.
Pass-through returns are penalized per owner per month: IRC 6699 charges about $245 × shareholders × months late (12-month cap), regardless of tax due — the 1120-S itself rarely owes any. The deadline is March 15, a month before everything else, which is exactly why first-year S corps and just-converted LLCs walk into it. The bill announces itself as a CP162.
The meter runs monthly until the return is in; nothing is abatable while it isn't.
Prior 3 years clean — including years before S election — and the penalty comes off near-automatically. Say 'first-time abatement' explicitly.
Reasonable cause for new S corps (wrong-form extension, conversion confusion) with a concrete timeline succeeds regularly.
The extension is automatic and free — six more months, no penalty. The whole problem is a calendar entry.
Every notice page explains the deadline and drafts the response letter free — find yours.
Look up your IRS notice →About $245 (indexed annually) per shareholder, per month or part-month late, for up to 12 months — even when the 1120-S shows zero tax due. Two shareholders, six months late ≈ $2,900. It arrives on a CP162.
Yes — IRC 6699 is FTA-eligible. A clean 3-year filing history on the S corp's account removes one year's penalty with a phone call or short letter. It's the single highest-value FTA in the small-business world.
The usual grounds (illness, disaster, records) plus one S-corp special: genuine confusion in the first S year — a just-converted entity that filed an extension for the wrong form, or reasonably believed no return was due — succeeds often enough to be worth arguing with specifics.
Furnishing K-1s late to shareholders is a separate per-K-1 information penalty. In practice the 6699 per-shareholder-per-month charge is the one that stings; fix both by filing complete, now.