Rant mode/toggle/off...
What is the time requirement for retaining records in this case?
Could the recordkeeping at the IRS in various places be so bad that the records were lost?
IIRC, the IRS did just hire a bunch of people. They’re trolling for dollars.
bump
Have you tried submitting an official request for copies of the documents from the IRS? I would want to know what response they provide. If they produce them, then you can ask why the IRS agent could not call them up. It would be an interesting experiment that would not necessarily upset anyone.
Of course, by posting this, you’re toast, as am I for responding...
If you sent 940’s quarterly and 941’s annually that could be part of the problem. It’s the 941’s that are supposed to be sent quarterly and the 940’s that are annual.
The other thing that comes to mind right off the bat is if they are paying “contractors” instead of employees for certain services. The IRS is hell bent for leather on the issue of whether a “contractor” should be treated as an employee with all withholding done at the corporate level rather than at the individual level.
THings to think about....
1. Are these people Republicans?
2. Could this be a part of perfecting something that enlarges and goes against incorrect accounting practices of corporations, e.g., ‘corporations are the bad guys’.
Sounds like you’re the front line and quiet way to perfect the strategy, since your clients wouldn’t have $1000/hour/lawyer legal team advice.
He not only distinctly recalled having filed those years, as in every year, but that he had had refunds all those years as well. The IRS insisted he file, he asked them for the data (very simple employee filing), filled out and signed the forms to get them off his back, and then had three refund checks to contend with.
He banked them, assuming the IRS would discover their error and want the money back.
Seven years went by, and he finally spent it.
The IRS, evil though they are, don’t just show up unannounced in person and start asking for copies of records without saying why they want them.
Well, my bad, a little googling tells me they sometimes DO just show up... but you don’t have to tell, or give, them anything. Check this out:
I hope you/they get it straightened out with a minimum of cost and inconvenience. Sorry for what you saw earlier as disrespect, but I didn’t intend it that way. Cheers.
The IRS transposed my middle child’s SS in their database (it was correct on the tax forms) but of course they couldn’t seem to fix the problem and some days they couldn’t seem to understand it.
First they notified tham that we had provided them with an invalid number, sent them photocopies of the BC and the SS card. The following year they seized our tax return for back taxes and fees, fines, etc because they retroactively refigured our return with one less dependant due to invalid SS# For another year and a half I kept phoning and faxing and mailing and they kept sending bigger due notices with bigger threats.
Occasionally I would get someone on the phone who professed to understand it was their error but they were always unable to access the file to affect the change.
Long story short, I finally contacted my US Senator with the documentation and asked him to get it fixed. By then they had seized two tax returns and would have held a 3rd. Got a nice letter back from the senator’s office and a check from the IRS.
So data loss, computer systems that don’t function, files and records buried in basements and staffed by people who don’t care and whose job security and union memebership means they don’t have to care.
Well, the IRS is incompetent, to say the least. I’ve been reading a blog about folks who filed for the First Time Home Buyer’s Credit. The IRS really messed up on this one, they’re months behind on getting the payment to those who filed, and just keep kicking the can down the road with excuses to the home buyers because of incompetency within the agency. Anybody care to read the blog, it’s here (scroll down, for pages of complaints about the IRS’s handling of this boondoggle):
http://www.lvrealty.net/news/first-time-home-buyer-tax-credit
I think the answer to your question is, Who knows?
Most likely the IRS office in question has hired new people, and they are fishing through the files looking for someone they can sock for some money. Who knows whether there is any logic in it?
I ran into a similar situation a few years back and it wasnt until I got ahold of 2 US Senators and got them involved that things calmed down. If you have a Republican Senator.
5 years is too long if the returns have been filed. The SOL has run for everything but criminal stuff. My guess is something about the returns your are filing are not matching to something, perhaps w-2’s, perhaps payments or perhaps when the FTPS was started something in the names did not match.
If you are not a CPA or attorney, find one that can get a POA and have them talk to agent. Clients are clueless in interpreting what they are looking for.
They offered to cut the penalties and fines in half if we would just send them a check! WTF! They can't seem to find that particular 1099 they say we screwed up on as well... just send the money!
It's small enough to just comply with their demand, but this smells of harassment, and I'm going to make them prove it!
It does seem odd for both your clients (in different regions) to be going through this at the exact same time. I’m not much of a believer in coincidences. If just a coincidence, I’d say they’re looking for employees categorized as something else/under the table. Otherwise, I’d guess they are investigating you.
Looks like IRS has been taking JBT training from BATFE chief counsels office.
I would bet on a fishing expedition to see if they can find the tiniest discrepancy between the originally filed forms and the new copies.