Quatloos!

It's starting up again. I believe we may have mentioned this problem a year or two ago. I'm starting to get the computer-generated notices from the Internal Revenue Service for my clients again, stating that the Service can't find a 2009 Form 1120 return. The IRS seems to "think" that the return should have been filed a long time ago. Of course, this is late on Sunday, February 28, 2010 as I write this, and a calendar year 2009 Form 1120 return isn't even due until March 15, 2010.

A year or two ago I was getting lots of these letters on various clients.

I'm also starting to see the IRS notices that state that the EIN on a particular entity is invalid (for returns already filed), and that the IRS is therefore assigning a "correct" EIN. We have seen lots of these in the past. As far as I know, with one class of exceptions, the IRS has been wrong every single time on this issue. The client is always able to go back and demonstrate that the EIN used on the returns is in fact the very EIN that the IRS originally issued to the client.

The exception (or possible exception) is the case involving EINs that begin with either "20-" or "26-". Somebody at the Service told me that these EINs are "temporary" numbers that are assigned by the Service, and that the client should have later received a notice from the IRS showing a different, permanent EIN. Does anyone know if this is correct?

If you are receiving these on multiple clients, it sounds as if it might be a systemic problem. You should (in your free time during filing season) contact the TAO to let them know that there is something wrong in the system and give them sufficient evidence that they can make an effort to track the problem.
Reason #7 the TAO system isn't as good as the IRS likes to think it is

I've never heard of such a thing. I have, however, had it out with a couple of RO's on collection matters, who insisted my client have a 2009 Form 1040 filed before they'd work with us...and this was in the middle of February.

Someone in the insolvency unit suggested that this in in the case of clients who are currently in bankruptcy proceedings. There seems to be a "you have to act first" problem between the tax and the bankruptcy statutes. However, that would be a (hopefully) rare occurence with on-going clients