I left a message with IRS/CTR people, but haven't heard back, so I will solicit your opinions:

Sole proprietor customer(MSB)decided to incorporate in 2007. Every year we have the account officer's review the high risk customers and one of the questions is has your corporate status changed. Every year the response was no, so we continued to complete CTRs as a d/b/a. Today, I find out the customer gave the account officer the incorporation paperwork shortly after incorporation but the account officer didn't tell me or anyone else for that matter.

So- now, do I have to file amended CTRs? The Tax ID number is different (obviously) so I am guessing yes, but this amounts to about 75 CTRs.

What do you think (besides the account officer should be strung by his ankles from a high, high, string!)?

While I have not gone through a similar situation, this is strictly an opinion. Like you, I would want to hear back from the IRS/CTR Computing Center prior to making the corrections so as to hopefully get some guidance (in writing would be ideal) stating that filing corrected CTRs is not necessary in your case. But I have a feeling that submitting corrected CTRs may be what you are directed to do.

When your proprietor incorporated he became a new "person". You may, therefore, have a failure to file situation as opposed to merely CTRs filled out incorrectly. Be sure to document the backfiling request carefully, including when he would have become eligible for exemption as a corporation.