May 7, 2008

Q & A: Digging Up Old Records

QUESTION: Hoping to find someone with experience in this situation. My client filed a 1040 for the year 2000 and made a substantial payment with the return. As a result of a strange sequence of events I won't go into, we recently filed amended returns for this entity all the way back to 1997. The IRS is now saying that they have no record of the 2000 return or the related payment, and that we need to provide a copy of the return and a cancelled check. The copy of the return is no problem. The cancelled check….of course our client doesn't have that handy and I can only imagine how long it will take their bank to dig this up (at $10 per hour). The IRS rep said a bank statement won't suffice. Any other suggestions?

ANSWER: It may be prudent to research the amount of the payment to see if the IRS posted it to another year. This would require asking the IRS to look for the exact amount of the payment in past balance due years. The IRS master file with command code "TXMOD" will pull any active or prior active years that the IRS should search. The client may have had a balance due in these prior years that they applied the payment and, because it is off the radar for collection, they did not research.
In any event, if this does not occur, the obvious question is where did the check post. Without the check, it may be futile. I suggest researching all of the other IRS modules as the IRS cashes most all of the checks-- where it applies the check is where the research comes.
Hope this helps you. Provide more updates so we can walk through this together.

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