IRS Notice CP-259

[ILLMAS]

My client recieved a letter from the IRS claiming they didn't file form 7004 for December 31, 2006, however the corporate return was filed back in 2007? This is the first time I have ever seen a notice like this requesting a copy of the extension after the return was filed. Has anybody encounter this?

[Gail in Virginia]

Got my first one the other day - was totally shocked! I would have expected if they didn't have the extension, they would just notify you your return was late and tell you what the penalty was, leaving it up to the taxpayer to prove they sent a 7004. At least that is the way I remember it working in the past. This was a new one on me.

[TANDER26]

I believe they are having some kind of computer programming issue with the 7004 forms filed in 2006. I received a CP-259 last month regarding a LLC that filed as a partnership. They had an e-filed 7004, transmitted and confirmed prior to April 15th.

It says

Our records show that you have not filed the tax return as shown below.

Form ................................................ Tax Period Ending

2758 .........Fiduciary Income Tax......... Dec. 31, 2006

This makes no sense at all for a 1065 filing with a valid e-filed form 7004.

The 2758 is an obsolete extension form, and did not exist for the tax year 2006 (2005 either), because they put all the business returns together on the 7004, with code numbers for the entity type.

[kcjenkins]

That is so typical of today's IRS. They have no idea what is going on in their own system, yet they blame it all on the taxpayers.