Filed 2012 Tax Return w/Refund yet IRS assessed FTF & Interest penalty

[AZ-Tax]

I filed a 2012 Single status w/1 dependent tax return about a month ago. W-2 had not Fed withholding. I filed the Sch C with no bus related expenses. The TP had tax due but the EIC took care of that plus a refund. The IRS recalculated the tax return and the TP received 15% less of a refund that I calculated but still a refund. If that was not bad enough, the IRS assessed the TP a FTF penalty and interest. What am I missing here?

[taxea]

Perhaps a screw up by the IRS. If you are the third party contact without a POA you can talk to them about it until 04/15/14.

[ChEAr$]

I filed a 2012 Single status w/1 dependent tax return about a month ago. W-2 had not Fed withholding. I filed the Sch C with no bus related expenses. The TP had tax due but the EIC took care of that plus a refund. The IRS recalculated the tax return and the TP received 15% less of a refund that I calculated but still a refund. If that was not bad enough, the IRS assessed the TP a FTF penalty and interest. What am I missing here?

What's missing is information in the IRS letter explaining the changes. It might even still be in transit, so give it ten days to get to client.