Hello,Some people amend for every mistake. This is a waste of money for a small error like this one. It wastes your money, whether that's an e-filing fee or just printing and postage. It also wastes taxpayer money since the IRS has to pay to process form 1040-X, which is always processed manually, even when e-filed.
Just calculate the correct taxes and pay the difference. Make sure to pay after you receive your tax refund so the money isn't refunded to you. As long as you pay after the tax refund, the balance will sit in your account until the IRS runs the document matching.
When the document matching is run, the IRS mainframe will recalculate your taxes and deduct the difference automatically from your account. It will then send you a letter. As long as you paid the correct amount by April 15, the letter will tell you that you owe $0 in interest and penalties.
I wanted to get your thoughts on this as all the tax software discussion earlier reminded me of this post. It's a relative's situation. A paper 1040 for 2024 was filed; the amount of taxable interest was, for purposes of discussion, $12,345. The IRS was extremely careless in entering it and recorded the taxable interest as $123 (confirmed on the transcript) and also apparently recorded one of the SSNs incorrectly. This generated a math error notice dropping the income and tax due and thereby enlarging the refund, and also dinging $50 for a missing or incorrect TIN. The first attempt at using Direct Pay (as a tax year payment) to return the excess refund caused it to come back to the bank with interest after a few weeks. A second attempt using Direct Pay (as a proposed assessment) to return it seems to have stuck. Sending a written reply to the math error notice with this explanation just caused the IRS to send a blank 1040-X in response.
- The IRS suggests asking your involving your bank to return an incorrect direct deposit refund; was that the proper action in this case? I didn't recommend it, because that seemed to be for a refund you weren't expecting (e.g., someone else's), not a refund you were expecting but in the wrong amount.
- The IRS took so long to process the return that the refund and Direct Pays returning part of it were all in June/July; I assume a CP2000 will come once the 1099-INTs are matched, and there will be interest on it?
- How would you appeal the penalty for missing or incorrect TIN? The IRS ignored the attempt to dispute it in the response to the math error notice; you can't use a 1040-X to do it, and Form 843 doesn't look like it applies.
- I assume they should avoid filing 2025 until this is resolved or October 2026 comes along, as filing a 2025 return may cause the computer to refund the 2024 account balance once again, if the 2024 tax hasn't yet been recomputed to reflect the correct taxable interest on the return.
Statistics: Posted by Makefile — Fri Nov 07, 2025 10:12 pm — Replies 29 — Views 3256