Yet another IRS screw-up - this time with a 5330

[Belgarath]

Anyone else received one of these? Client submitted a fully completed and signed 5330 for late deposits of 401(k) deferrals. Client received an IRS letter, from Ogden. No form #. The letter states that the 5330 was unsigned,, doesn't say whether the PT was Discrete or other than Discrete, didn't give the amount of the PT, doesn't indicate whether you corrected all of the PT's. Of course, ALL of these items were completed, and completed properly.

They give you the option of checking the boxes and completing a couple of items, and signing a declaration that the form is true, correct, and complete. BUT, they tell you NOT to include a copy of the original for 5330, unless you are correcting/amending it, which of course you aren't, because it was correct and complete in the first place.

So, you are left with the choice of completing their form, or calling, which is likely to take hours and probably get wrong info anyway...

If this was an automobile, I'd be suffering from road rage...

 

[Peter Gulia]

In some dim past, IRS correspondence problems seemed fewer and perhaps less burdensome to resolve, so many third-party administrators handled the messes without charging an incremental fee.

Are some TPAs now billing time for handling the IRS messes?

For those who aren’t billing this incremental work, why not?

Or is a TPA’s fixed fee priced to include costs for handling IRS messes?

[Belgarath]

Obviously, if there's something due to an error WE made, we wouldn't bill! Other than that, yes, we are billing for our time, although sometimes you have to exercise some judgment depending on the client, and we can't always bill for all of our time. But we aren't giving away as much as we used to.

 

Fixed typo.

[Peter Gulia]

I’m glad to hear that TPAs now are expressly counting at least some of the cost.

[Roycal]

This is life.  I'm all for beefing up the IRS with more funding for more people, better trained people, and better hardware and software.  I'm currently involved, personally, with a screw up between the IRS and the Social Security Administration.  It's so screwed up it's funny, except that I have to deal with it.  Five figures are involved.

[Belgarath]

Update - IRS letter was dated 11/16, with 12/16 response deadline. I don't know what day client actually RECEIVED the letter, but I believe it was after Thanksgiving. They only sent it to us on Wednesday. Client called the IRS yesterday to request a two-week extension on the deadline. DENIED.

Not very user-friendly...

[Peter Gulia]

Anticipating that the Internal Revenue Service might fail to record the paper received from the US postal service, I often add “Form nnnn” on the green return-receipt card, to set up a little more evidence about what the IRS received.

Do others use some method like this?

If so, does a response that shows evidence of this kind help persuade the IRS that a notice is mistaken?

[Belgarath]

That's a great idea!!!