E-filed corporate tax return for client back in July. Client prepares their own payroll tax returns and they filed the 941 return for the second quarter also in July. Client received IRS notice that the refund that we wanted to apply to next year on the 1120 would not be applied, but they did not give the specific reason. Client called the IRS a couple of times, and then realized that she made a mistake on the 941 deposit and applied it to the wrong quarter, resulting in an amount due for the second quarter, so the IRS took the 1120 refund. Now she sent a letter to the IRS explaining what happened and asking them to apply the 941 deposit to the right quarter, and hopefully she will get the 1120 refund back to be applied to next year. May take a little while to work through the system, but I told her the IRS is honest, and eventually she should get the 1120 refund applied.
