I have a client who has received a letter from the IRS Memphis Service Center, dated September 2, 2008. As is often the case, the letter does not name the tax entity (a section 1398 bankruptcy estate) -- just the name of the trustee, the case number, and the EIN. But that's not the problem.
The letter states, in part:
We made a thorough search but are unable to locate the returns(s) you filed for the following tax period(s):
Form Tax period
1041 Dec. 31, 2008
If we do not receive the return within 30 days from the date of this letter we may determine that you're refusing to comply with the law. As allowed under Internal Revenue Code 6020b we may prepare a return [ . . . etc etc yada yada yada]
Note: All Form 1041 tax returns for this entity, 2004 - 2007, have already been filed, as well as a final short period return for Jan 1 - Jan 31, 2008.
My theory: The IRS has lost one of the returns for 2004 - 2007 and, in preparing their request for a copy of the "missing" return, has inputted the data incorrectly.
This is the second or third notice like this I have received this year (all on different, unrelated bankruptcy cases).
In fairness, I concede that quality control at the IRS may actually have improved over the years to some extent. About 10 or 15 years ago, it seemed that over half the IRS notices I received were erroneous in some way. That percentage seems to be down, now.
Still, we love to show notices like these around the office.