Quatloos!

I can't remember whether I've posted on this topic before.

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.

Note: In another case -- before April 15, 2008 -- I received the same kind of threatening letter regarding a December 2007 Form 1041 return that had "not yet been filed." The notice was dated prior to April 15, 2008, and was received prior to that date, and yet the notice threatened 6020(b), etc., etc.

I realize that due to the volume of mail, there is probably no way that the IRS can make a "sanity check" of each and every notice before it is mailed.

Famspear wrote:I can't remember whether I've posted on this topic before.

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]

Do you mean "2007"? Otherwise, it makes perfect sense why they can't find the 2008 one.

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]

To Whom It May Concern:

Upon reviewing our records, we were able to determine that you are indeed correct - we have not filed a 1041 for tax period Dec. 31, 2008. This is due, in part, to the debilitating breakdown of our in-house time machine which would have allowed us to jump ahead to the end of the tax period, compile the numbers, and file the 1041 by the deadline. Unfortunately, our associate at Taylor Rental is due to pass away from natural causes on May 31, 2007 and as a direct result, is unable to rent us a time machine that would facilitate this process.

We trust that the IRS's time machine is in proper working condition, and expect that you are already aware of the massive overpayment that will be made on the account. We respectfully request that you forward the overpayment, plus interest, to our office before receipt of this letter.

Thank you for your consideration in this matter, and congratulations on the new addition to your family. I bet you're glad you didn't want to find out at the ultra-sound three months from now that it's a boy.

Dezcad wrote:Do you mean "2007"? Otherwise, it makes perfect sense why they can't find the 2008 one.

The notice definitely says "2008" - and if I had the time, I would write them a long, smart a** letter explaining to them why it makes perfect sense that they can't find the return.

As it is, I will probably write a short, polite, and "not too sarcastic" letter. When I have time.

A couple of years ago I had to file an amended return for 2003. About six months later I got a letter stating that they could not locate my amended return and getting all threatening about me not submitting it. Nice system - they knew they had gotten an amended return, but couldn't manage to figure out where it was and blaming the tax payer for it being lost.

The notice definitely says "2008" - and if I had the time, I would write them a long, smart a** letter explaining to them why it makes perfect sense that they can't find the return.

As it is, I will probably write a short, polite, and "not too sarcastic" letter. When I have time.

Sarcasm will most likely be lost on the GS-7 doing the first read on your letter. Short and polite is good. More important, do not assume that the IRS employee reading your letter will be aware of the obvious, e.g., that "Dec. 31, 2008" is clearly a typo.