Thanks Kalpesh for the response. and for the references. I will take their services as I’m freaking out. As its weekend, I’m trying to gather feedback.
We have got bad advice from CPA and have mismanaged the whole thing. Usually, every quarter, CPA handles this filing and we give the checks and sign the form. I informed of going out of status but he asked us to still continue to pay payroll to be in good books of IRS.
The s-corp business had some pending money to be received from customers. The S-corp did not get generate any money from Dec 2 to May 28 but received the pending money on 29 May and once in early June. Also, November services money was received on 1st Dec. His advice was to keep minimum payment by payroll so that we are in good books of IRS. So, payroll taxes were paid.
So, we have unfortunately mismanaged it.
I tried to read the options I have to prove unauthorized work was not performed and would like to know your feedback.
a) File 941-Correction to make correction of no payroll taxes and submit that
b) Letter from the S-Corp – I’m not sure about its value. My wife is the only sole-person there. You suggested an affidavit. Can you give me more details. What should it contain.
c) I read that for employement based category, upto 180 days of violation can be overlooked. Ours is unfortunately 220 days violation but hoping if we can show at least one quarter (Jan-Mar) convincingly, we can use this provision 245(k).
Can you also help me understand the implications if the officer is not convinced of what we submit ? Is it only denial of 485 adjustment for wife or does it go beyond that ? (like deportation etc.) ?
Thanks a lot. I’m just freaking out.