oh wow. This is really messy. Here are the steps I would go through 1. File an amended form 1065 to indicate activity. Give all of theofficers a corrected K1. Theyll need it to file their amended returns. 2. File the proper form 1120S expect inquiry letters from the IRS aboutthis. Be prepared with all of your documentation indicating that 1120S is theproper form to file. 3. File forms 941 940 State Withholding and State Unemployment. Youll needto gross up the officer payments. For example if Partner A received 80000in guaranteed payments youll need to actually file that as 86.626 toaccount for the 662. in Social Security and Medicare taxes that werewithheld from the paychecks in order to reach 80000. 4. Prepare W2s for all of the officers. Theyll need these for their amendedreturns. 5. Expect to pay lots of penalties and interest on the 941 forms since theyare now late. 6. Prepare to pay an accuracy related penalty although you may be able tobeg forgiveness on this one and get it abated. 7. Fire whoever made this error unless its your fault for not providingthat person with the appropriate documentation.