Hello! A new client for 2021 has recently asked me to assist with her 2017 tax return which was apparantly paper filed using her prior paid preparer in October 2018. However the IRS never received the return and sent her a notice about this in 2018 or 2019 but because she moved she didn't receive it. Then in 2020 right before the pandemic the transcript shows the SFR was prepared and examination opened. However she didn't receive the 90 day letter until a few months ago. I am told that she previously tried to resubmit the tax return but I suspect that it was sent to a regular service center address as opposed to the ASFR unit and as such also never appears to have been processed.
I spoke to someone at the IRS who told me to simple resubmit it and we don't need to file the 90 day notice court request. Is that correct? Simply resubmitting the return should hopefully get it accepted and the tax, penalties and interest adjusted?
Second, is that the 2017 return has some high Schedule C deductions for two lines (Auto and Meals) and I highly doubt the taxpayer has adequate records for those. I'm wondering if it'd be a better idea to adjust the return and report a lower amount of deductions to avoid having it contested/further examined. Are the odds likely of an examination once we submit the return?
Many thanks!