When filing Form 1120 (U.S. Corporation Income Tax Return), the IRS requires corporations with total receipts or total assets of $250,000 or more to complete Schedule L (Balance Sheet). If Schedule K, Line 13 is marked "No" (indicating total receipts and/or assets are $250,000 or more) but Schedule L is left blank, the return will be rejected.
📌 Possible Reasons for Rejection:
Schedule K, Line 13 is marked "No," indicating receipts and/or assets are $250,000 or more.
Schedule L is not completed despite the selection on Schedule K.
✅ Steps to Resolve:
If total receipts and assets are under $250,000:
Update Schedule K, Line 13 to "Yes."
Save changes and retransmit the return.
**If total receipts or assets are $250,000 or more:
Complete Schedule L (Balance Sheet).
Enter the required financial details and retransmit the return.