C Corp Fiscal Tax Year

[Diane]

I have a client with an 1120 fiscal year of 7/1 - 6/30. We filed the 2006 tax return for year ending 6/30/2007 last year. IRS is calling my client and telling him that they have not received the 2007 tax return; that the fiscal year end of 6/30/2007 should be a 2007 tax return and not a 2006 tax return. Now, I've been doing these taxes for 25 years and never had a problem with the year of the tax return. The IRS person told my client that she has been there for quite a while and knows what she is talking about. But, you couldn't even file a 2007 corp return on Sep 15 because they don't even have the forms out yet! She's telling him he has to file a 2008 tax return for this June 30 year end. Am I nuts? Have I been doing this all wrong for years? I can't seem to find in writing that you file according to the beginning of the tax year not the end of the tax year. I need help now. I have to call my client this afternoon.

Diane

[gfizer]

To my knowledge a fiscal year return is filed on the form for the year in which the fiscal year began and not the year in which it ended. I have never had this problem with a corp but have dealt with it for returns filed by fiscal year farmers. I had three who got letters all in the same year basically stating the same thing you are talking about. We did a lot of correspondence and talking on the phone and someone at the IRS finally admitted they didn't know what they were doing and changed everything in the system to show that everything had been timely filed.

Good luck!

[JohnH]

First of all, tell the person at the IRS you need their instructions in writing, not in a phone call. At least that will force them to look it up before committing anything to paper.

Inisiting on correspondence won't guarantee that it will straigten them out (as gfizer has illustrated), but at least you won't be dealing with a "he said/she said/we said" situation. At some point you're going to need documentation if they persist, so you may as well start right now.

[jklcpa]

Yep, IRS is wrong on this one. Refer your IRS person to the instructions for 2006 Form 1120. On page 5 under the headings "Specific Instructions, Period Covered" it's spelled out very clearly.

[Diane]

Thanks Everyone!

I'm now going to call my client.

Diane

[Chrisbry]

IRS is wrong.

HOWEVER -- if you make payments thru EFTPS, that information IS correct. I've argued with the IRS on several avenues about this -- they won't budge. Form 2290 is the worst one for this!

So remember, if you are filing a 2007 FYE 6/30/08 and pay the balance due thru EFTPS, be sure to mark it for tax year 2008 NOT 2007. Stupid huh?

[Diane]

No payments are made, thank goodness. Wouldn't want to have to deal with that. He has an NOL carryover with some accounts receivable coming in. That's the only reason he keeps it going.

Diane