Incorrect corporate tax letter from IRS

[PATAX]

New client received a letter stating that an amended tax return was filed for the 2019 C corporation 1120 return. An amended return was never filed. The original 2019 1120 return, which was the first corporate return which I prepared for this new client, was mailed by client in June of 2020.... The IRS letter States "Our records show we received your amended tax return for the tax period listed above. We're sorry but we can't find it, so we need your help to finish processing your tax return. It is possible that our records show the receipt of an amended/corrected Form 1120-S in error. If you filed an amended/corrected return, please send a complete, newly signed copy. If you did not file an amended/corrected return, please advise us so we can correct your account."    You will notice that they referenced 1120-S but it is a regular C Corp, which they state at the top of the letter letter (they state Form: 1120).  They do have a fax number where a response can be faxed to them.... 

[Just-Lisa-Now-]

IRS is a mess. Someone screwed up somewhere. If they cant find the amended return you never filed, Id just disregard the notice.

[PATAX]

Yeah thanks Lisa.. But what has me thinking is that they reference an S corporation in the body of the letter, but it is a regular C corporation..

[Just-Lisa-Now-]

Maybe some bozo with an SCorp mailed in an amended return with the incorrect EIN (which would probably be the reason they couldn't Efile the amendment) and the EIN really belongs to your clients C-corp?

I wouldnt waste too much time trying to figure this one out LOL

[PATAX]

Thanks Lisa... I usually do not accept new clients, but I made an exception... "new clients, new problems"....

[IRonMaN]

"We're sorry but we can't find it"

Well, at least they admit that they lost something that they never had.  It would have been worse if they wrote a letter saying that they found the amended return that doesn't exist.  I think the current IRS process is to let Larry open the mail, Moe then loses the mail, and Curly writes letters to say they lost it.

[PATAX]

Thanks Iron Man... What a year...

[abctax55]

And add CA FTB notices just arriving saying withholding from W-2's doesn't match (yet, it does...I suspect the EDD is the culprit) and 2020 is truly the year from hell.

[BobKamman]

Does the letter have an IRS  number on it (like, LTR 6714 or something like that)?  My guess is that they have one form letter that is used for both 1120 and 1120-S, and they didn't make all the changes.  It's sometimes easier to research, with that letter number. 

You should answer, or the account for 2019 and future years might be frozen for lack of response.  You should not fax your response, because of the problems reported earlier this year with IRS fax machines.  They ran out of ink, and the technicians couldn't get in the building to service them.  

[PATAX]

Thanks Bob... It says at the top of the letter, LTR 418C.... Thanks for the facsimile information because that is what I was going to do since they provided a fax number... they also gave a phone number but we know how that goes... The letter is signed by a program manager, AM OPS 2...

[PATAX]

👍 and it looks like the 2021 tax year filing season is going to be a twin of 2020... Evil twins from Hades...

[Just-Lisa-Now-]

I havent had any of those FTB withholding notices...yet. Had dozens of them a few years ago!

[BobKamman]

From the only reference to Letter 417C in the Manual, it seems to me that it applies to refund claims (which are unlikely for an 1120-S).  Someone at IRS might have been trying to pound a square peg into a round hole, because there is no standard form letter for requesting the original return when an amended 1120-S is involved.  Are you sure that the original 2019 return did not inadvertently have the "amended" box checked?  

21.6.7.4.2.4 (10-01-2018)

TC 150 - Original Return Not Obtained

1. If a TC 150 is located and there is no reason to request the original return for verification, make the adjustment using the appropriate blocking series. See IRM 21.5.2.4.22, Blocking Series (BS).

   If the original return is requested but not received andThen

   The return is charged out to another area	Contact the area for the return or a complete copy.
   The return is not charged out to another area	Request the return a second time.
   A second request does not secure the return	If unable to secure the return after the two previous requests, input another request as "Special Search" using Form 2275, Records Request, Charge and Recharge. For information on where to fax Form 2275, refer to Who/Where Tab, then click on the Files Contact Listing (the former IAP) to research the fax number of the file location needed. Send a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to the taxpayer. Note: Exhaust all in-house means to secure the return before contacting the taxpayer. Suspend the case for 40 days; 70 days for overseas taxpayers that meet international criteria. Refer to IRM 21.8.1.2.14, International Forms Processing, for additional information. If no reply to the Letter 418C, Amended/Original Return Unavailable; Copy Requested, follow procedures in IRM 21.5.3, General Claims Procedures.

[PATAX]

Thanks Bob...I believe the original 2019 return had a refund which I applied to 2020 and I would be stunned if I marked it amended as it was first year I prepared this new clients returns, but  anything is possible. .I will check when I go to office as i am at lake with the gsd..thanks

[PATAX]

That was not supposed to be the solution... Like everything else this wack so-called smartphone is screwed up too....

[George4Tacks]

@PATAX when you get back to a "real" computer, there are 3 little dots and  I believe you can select Not the Solution. 

😀Smartphones are only as smart as their user. 😝 User input is also dependent on the size of the screen and the age of the eyes and the fatness of their thumbs. 😇

[PATAX]

Yeah you're right about that between these popbottles and the super sensitivity of this so-called smartphone that's what happens..

[PATAX]

1120X was not filed - I do not see an "amended box" on form 1120, don't think there is one.....refund of $6,000.00 applied to 2020 form 1120 from 2019 form 1120....

[PATAX]

Thanks George, the three dot tip worked....It is good to learn something new every day...when you stop learning then you are done.....

[Anglis · Accepted solution]

Our office here in GA also received the same letter for a client. We responded to them via fax, stating no amended return had been filed and the IRS has an error in system related to this corporate.

So you are most likely not the only one, apparently the IRS is making alot of errors this past year.

[PATAX]

👍Thanks a million Anglis