Continuity mistake: When we first see Lou, he is pushing some rubbish down into the bin, camera cuts and he now has a box in his hand. (00:00:05)
Continuity mistake: The Heffernans have a double garage as witnessed in any scene in the garage. However, in this episode at the start they only have a single garage. (00:00:30)
Continuity mistake: The Heffernans have neighbors on both sides of the house as seen in previous episodes. However there is no house to the left of theirs when we see Lou at the very start. (00:00:40)
Continuity mistake: When Doug goes to get Carrie's present from the closet her position on the bed changes between shots. (00:05:30)
Continuity mistake: When Carrie gets her camera it changes position in her hands before she turns it around. Note the strap, it goes from left to right. (00:06:00)
Continuity mistake: After Carrie says she's taking Doug's camera to her office party, the box magically appears on her lap. (00:09:50)
Answer: Sara hasn't been mentioned in later episodes, and it suggested in later episodes that she never existed, and that Carrie is an only child. Kevin James stated that the producers couldn't think of an good plots to use with Sara, so they left her out.