Check not recieved by IRS

[LuckyDevil]

I mailed my taxes in on or before April 16, 2007. Two weeks later my State check had gone through, but my Federal check had not. I called the IRS the next day and talked to a representative. They said they don't have a record of receiving my forms or check yet, but that it was fairly common considering how long ago i mailed them. She also said it was to early to do anything. She said to call them back around the beginning on June, if they still hadn't gone through.

Fast forward to present day. The check has still not gone through. I get a letter from the IRS today saying i owe my taxes (the amount i had originally sent, so they did get my form, but the check must have been lost) plus interest and penalties.

My question is, if i call the IRS back and tell them that i did send that check, and it must have somehow got lost or misplaced, and also mention i did make an effort to resolve the matter earlier (that call is noted and on their records), are they likely to drop or lower the penalties and interest without to much of a fuss? What am i likely to hear from them? I have no physical record of the check, or of mailing the check.

How likely is this event to increase my chances of an audit? I paid my taxes 100% to the best of my ability, but of course no one wants to be audited.

I'm going to call the IRS tomorrow to at least get a payment sent. I just wanted to know if it was even worth contesting the extra charges over the phone. The amount is small enough that its not worth hiring a lawyer/accountant/whatever even if i do have a case.

Thanks in advance.

[Grasshopp3r]

You can explain it to them and contest the fines. My wife is a CPA who did this routinely and if you are sincere, it usually works just fine. They are thrilled to take your money.

[bav]

I was chatting with an accountant once who said he had a similar problem one year. He called 'em and said he DID send a check. They called back the next day and said they found it--that it was, in fact, in the envelope and had been overlooked. Apparently they are fastidious about keeping EVERYTHING you send them, including the original envelope. So they just went and found his file and pulled out everything from this year and his check tumbled out of the otherwise empty envelope.

If they don't find it, you likely can get the penalties waived. They're more likely to demand the interest, but if it's a few dollars they'll almost certainly waive it--I've had 'em send me complaints about this or that and when all was said and done I owed 'em like $6 and they said "never mind, close enough".

[Poker CPA]

This is a common problem. Send a new check and an explanation of your circumstances. In addition, send a copy of your bank statement showing your cash balance was more than enough to cover the check. Good Luck