Amended tax return question

[SecondCor521]

Hi all,

I filed my 2020 tax return in March. On that return, I included a 8962 which included numbers from four different policies. I have 1095As for three of the four. I never received a 1095A for the fourth policy and my inclusion of the numbers for that policy is an error. It is an error because the fourth policy was a catastrophic policy which does not qualify for PTC.

I received an IRS letter dated June 4 saying they "need more information" and that they "haven't received information from the [marketplace] indicating that you or anyone listed on your tax return was enrolled..." and to "send us a copy of your forms 1095A...to support the amounts you reported on Form 8962". They also say "Do not respond with a Form 1040X". Finally, "If we don't receive a response from you, we may have to increase the tax you owe or reduce your refund."

So I'm not sure how to proceed.

I tried calling the number. They let me choose 1 for English and then hung up on me.

I'd like to file a form 1040X. I know how to, I know what I need to change, I can e-file it, etc. (I'm an AARP Foundation Tax Aide preparer - maybe I shouldn't be ).

I could wait and let them straighten it out, but I'm a bit concerned that they would throw out my entire 8962 and not just reduce it by the relevant amounts for the fourth erroneous policy.

I could respond to the letter, but I'm not sure how. They say to enclose only the information they request and a copy of the letter. I think I could write and say, yeah, I screwed up, but just take off the fourth policy and leave the other three on there.

Any advice / wisdom / knowledge? (@cathy63 or @pb4uski?)

Thanks!

 

[SecondCor521]

At this point I'm leaning towards writing a letter, saying I messed up, providing the three 1095As I did receive, a revised 8962, and mentioning what I think my adjusted refund amount should be.

I'm on hold with the IRS to try to make an appointment, and also reading the online general help at IRS.gov.

ETA: My tax return in this area is easy - my refund is going to simply be my 8962 net premium tax credit minus a small amount of regular income tax due.

 

[38Chevy454]

At this point I'm leaning towards writing a letter, saying I messed up, providing the three 1095As I did receive, a revised 8962, and mentioning what I think my adjusted refund amount should be.

I'm on hold with the IRS to try to make an appointment, and also reading the online general help at IRS.gov.

I think this is a good plan. Since IRS is singularly focused on your 8962 form, and the missing 4th document. Just play their game by their rules and answer the inquiry letter, with your explanation of what you did initially and the new revised information and refund amount. IRS computers are good at cross referencing information between the sources, but no so good at figuring out what needs to be done.

 

[euro]

At this point I'm leaning towards writing a letter, saying I messed up, providing the three 1095As I did receive, a revised 8962, and mentioning what I think my adjusted refund amount should be. (My tax return in this area is easy - my refund is going to simply be my 8962 net premium tax credit minus a small amount of regular income tax due.)

I'm on hold with the IRS to try to make an appointment, and also reading the online general help at IRS.gov.

I think the letter you are planning is exactly the right thing to do. Keep it simple! If that works then all is well. Contrary to popular opinions, they do have reasonable staff there and many times, a simple explanation will suffice. When it doesn't, then you can always take bigger action. Chances are, this will work out just fine.

 

[SecondCor521]

Thanks for the reply. And right, I think that makes sense.

The only thing is that the letter says they didn't receive *any* 1095A forms. Which is probably inaccurate; they should have received the three that I did. I'm sure it's a form letter and thus is probably the closest one for the present situation, but I don't know how much to quibble / clarify.

At this point I'm going to aim to be as clear, concise, and precise as possible. I know the IRS folks are really overburdened and I want to resolve the error as efficiently as possible for all concerned. I'd also like my refund, of course.

I wonder if they'll pay me that 3% interest in this situation, since the error was mine. I guess I'll find out in about 6 to 8 weeks.

 

[ivinsfan]

I'm impressed with the speed of the letter. I agree that just answering their questions is the way to proceed. I would probably use certified mail.

 

[pb4uski]

Agree... since they specifically requested that you not file a 1040X I would not file a 1040X.

What I would do it to write a letter that is substantively a 1040X explaining that you messed up and showing the result if you had excluded that last 1095-A and outling the revised amount of your refund. I would include in the letter a table similar to the 1040X showing the relevant numbers as filed and as revised.

And include copies of the 3 legit 1095-As that you are including in your revised numbers and a revised 8962.

 

[pb4uski]

I'm impressed with the speed of the letter. I agree that just answering their questions is the way to proceed. I would probably use certified mail.

DS got a letter with similar timeframe last year.... we just forgot the 1095A since he had shifted to his employer plan early in the year... turns out that he was due a larger refund.

 

[SecondCor521]

I'm impressed with the speed of the letter. I agree that just answering their questions is the way to proceed. I would probably use certified mail.

Meh. I e-filed 3/17 and the letter is dated 6/4. Not bad given the circumstances, but I would not call it speedy.

 

[SecondCor521]

Agree... since they specifically requested that you not file a 1040X I would not file a 1040X.

What I would do it to write a letter that is substantively a 1040X explaining that you messed up and showing the result if you had excluded that last 1095-A and outling the revised amount of your refund. I would include in the letter a table similar to the 1040X showing the relevant numbers as filed and as revised.

And include copies of the 3 legit 1095-As that you are including in your revised numbers and a revised 8962.

Thanks. That's about what I'm going to do. The 1040X table is a good idea.

 

[SecondCor521]

Sent the letter June 17, 2021 with all the info.

Sometime in the past few days the IRS opened the letter. Apparently they're reading it now.

Still no ETA on my (adjusted) refund.

 

[SecondCor521]

I know many of you had a sleepless night wanting an update on my situation from a few days ago.

The IRS appears to have more or less agreed with my pseudo-amended return. Today I wake up to find a refund in my checking account.

But it's only for about half of what I expected. Plus interest on that about half.

I checked my IRS transcripts and it appears that they agree they still owe me the other half.

Question of the day: Why would the IRS split my refund into two pieces?

 

[ivinsfan]

They are waiting for payday and afraid they might bounce a check. Alternatively they are trying to mess with head.

 

[SecondCor521]

Heh. I googled and found a general explanation that they're probably withholding part of it in order to do some sort of verification on me. I don't know what they could possibly be verifying, but the Internet seems to say that the IRS will send me a letter within 14 days.

The good news is I was able to figure out how much of the partial refund was interest (3% back to 4/15/2021 - sweet!), and the amount they still agree they owe me makes it seem that they agreed with my amended figures. So I got that goin' for me.

 

[ivinsfan]

Heh. I googled and found a general explanation that they're probably withholding part of it in order to do some sort of verification on me. I don't know what they could possibly be verifying, but the Internet seems to say that the IRS will send me a letter within 14 days.

The good news is I was able to figure out how much of the partial refund was interest (3% back to 4/15/2021 - sweet!), and the amount they still agree they owe me makes it seem that they agreed with my amended figures. So I got that goin' for me.

Which half of you do they need to verify?

 

[SecondCor521]

I took a closer look and have an explanation that sort of makes sense.

My refund was really due to two different refundable tax credits: the AOTC (on Form 8863) and the ACA net premium tax credit (on Form 8962).

The amount the refunded me appears to be for the AOTC. They still appear to owe me for the ACA net premium tax credit.

So I still don't know what they need to verify with the ACA net premium tax credit. They presumably received all of the 1095-A's originally. I sent them copies of the 1095-A's again when I sent my response letter. On another IRS transcript, it seemed to me that their computer calculations agreed with my calculations in my response letter.

I'm mildly curious as to why they seem to agree they owe me the second half on the one hand, but need to verify something on the other hand. But I'm not curious enough to get up at 4:59am and start speed-dialing the IRS offices to wait on hold for two hours to ask someone who probably won't know the answer anyway.

I guess I'll wait for an explanatory letter or the additional refund.

:shrug:

 

[pb4uski]

...Question of the day: Why would the IRS split my refund into two pieces?

The other piece of your refund would have exceeded the debt limit?

 

[SecondCor521]

The other piece of your refund would have exceeded the debt limit?

I will say, though, the connection between my IRS refund and our national checkbook situation has crossed my mind a time or two.

 

[SecondCor521]

I'm mildly curious as to why they seem to agree they owe me the second half on the one hand, but need to verify something on the other hand. But I'm not curious enough to get up at 4:59am and start speed-dialing the IRS offices to wait on hold for two hours to ask someone who probably won't know the answer anyway.

I guess I'll wait for an explanatory letter or the additional refund.

:shrug:

I got a little tired of waiting, decided to try calling the number they showed on the "Where's My Refund?" page with the code that was on there to see if I could get a person.

Lo and behold, I actually talked to an IRS person! In Long Island!

She was quite nice but didn't know anything other than that there were no notes on my account. She suggested that someone somewhere was probably working on it, and to check back again in 30 days.

OK.

 

[SecondCor521]

Got a notice from the IRS in the mail today. It appears they agree with my correction, and they say they're going to pay me the refund in the next 4-6 weeks. Yay!!

I also got paid $31.90 in interest, which I'll need to report on my taxes next year.

It's just a relief to have it all straightened out and that we're all on the same page.

Now you can all get a good night's rest! ;-P

Thanks to all who helped / advised. Much appreciated.

 

[PaunchyPirate]

Got a notice from the IRS in the mail today. It appears they agree with my correction, and they say they're going to pay me the refund in the next 4-6 weeks. Yay!!

I also got paid $31.90 in interest, which I'll need to report on my taxes next year.

It's just a relief to have it all straightened out and that we're all on the same page.

Now you can all get a good night's rest! ;-P

Thanks to all who helped / advised. Much appreciated.

The 4-6 weeks refund stated in the letter my mother got is now at 9 weeks and counting. Don’t spend that refund yet!

 

[SecondCor521]

I'm sorry you were all awake wondering about this.

I have another update. They haven't yet refunded me.

Apparently there is something called the Questionable Credits Department (QCD) at the IRS. Apparently my PTC is suspicious to them for some reason, so the "4-6 weeks" mentioned previously was never going to happen. They were supposed to send a 4800C letter, but they hadn't yet.

A rep in the QCD said that they probably/apparently wanted more information. So at her direction, I saved off and sent in 19 (!) files showing my premium bills and payments, my enrollment in the plan, my 1095As (again) and my updated 8962 (again), plus a letter. Thankfully I could upload them to a special IRS website for such things.

She affirmed that I can complete and submit my 2021 tax return without worrying about overlap. I thought that was the case but when they're holding on to what I view as my money, I'd rather not mess that up.

The rep indicated that providing all this ahead of the 4800C letter might shorten the amount of time for things to get resolved. She said it could be up to 120 days. The web submission portal thing said 60 days.

In theory I should be happy because in theory I should be getting 3% on $1206 dating back to 4/15/2021, which is better than my savings account interest rates. But honestly I'm just annoyed that this whole process is slow, cumbersome, opaque, and confusing.

<Sigh>

 

[lucky penny]

I wonder if they'll pay me that 3% interest in this situation, since the error was mine. I guess I'll find out in about 6 to 8 weeks.

Just be prepared that it might take longer. Last year I received an inquiry from the IRS about a problem with my 2019 return & I sent a letter in response 6 months ago. The problem was that since I hadn't included the cost basis for a TIPS that had matured, the IRS surmised that if the amount was zero, I owed a huge amount in additional taxes when I received the proceeds. (I described this in another thread.) I was hoping this would be resolved quickly when I provided the information needed, but I'm still waiting. I did get a form letter after about 3 months acknowledging receipt of my letter.

In my case the IRS also told me NOT to file a 1040X so I didn't.

 

[SecondCor521]

Update:

https://www.early-retirement.org/fo...-irs-in-this-scenario-112553.html#post2746519

 

[PaunchyPirate]

Glad to hear it seems they have figured this out and your refund is imminent. My Mother finally got her 2020 refund about 10 days ago after a successful assistance from the Taxpayer Advocates office. However, I’m not convinced they solved the long term problem of why the IRS keeps “killing off” my alive-and-kicking mother. All the TA agent could tell me was that they reset her flag again to being alive. If that’s all they did, they have already done that 3 times since her 2017 filing in 2018. But fingers crossed. The IRS “accepted” her electronic submit (TurboTax) for her 2021 return, which did not work last year. But it still shows “in progress” after about 2 weeks. Too early to fret yet, but obviously we are closely monitoring it.