When filing Form 1120 (U.S. Corporation Income Tax Return), the IRS requires corporations with total assets and total receipts under $250,000 to indicate this correctly on Schedule K, Line 13. If this question is marked "No" instead of "Yes," the return will be rejected.
📌 Possible Reasons for Rejection:
Total assets (Form 1120, Item D) are under $250,000.
Total income (sum of Lines 4–10) is under $250,000.
Schedule K, Line 13 incorrectly marks "No" instead of "Yes."
✅ Steps to Resolve:
Review Form 1120, Line D (Total Assets) and Lines 4–10 (Total Income).
If both totals are under $250,000, update Schedule K, Line 13 to "Yes."
Resubmit the corrected return for e-filing.