IRS Tax Notice

[ttbtaxes]

Client prepared his own returns in 2016 and just received a notice from the IRS that corrects the return for 2016 due to a typing mistake in entering information from a 1099-MISC. He entered $3,000 when it should have been $30,000. He agrees with the IRS notice and will prepare amended state tax returns.

I'm wondering if he prepare a 2016 1040X that agrees with the IRS notice and file it along with the notice or just sign the notice and pay the tax they show (I checked, the amount is correct)?

The IRS says you don't have to but it would leave a clearer paper trail with a 1040X.

https://www.irs.gov/individuals/understanding-your-cp2000-notice

[Burke]

He agrees with the IRS notice and will prepare amended state tax returns. https://www.irs.gov/individuals/unde...-cp2000-notice

I agree with IRS. 1040X just confuses things if there is no addl change to return. They will notify the state, but if he wants to file an amended there to settle the matter sooner, feel free. Attach a copy of IRS letter.

[taxea]

I would prepare the 1040X without filing just to be sure the tax they are asking for is correct. If 1040X shows a lower tax liability sent it along with the IRS notice and a check.

[JON]

I used to always use the 1040X as an attachment to the CP response. Then six months after the fact on the last one client got another notice. I called and they said the 1040X was fine, but they assumed it was sent through the regular IRS address. Everything ended OK, but it took more communications then I every want to go through. They did cash the check quickly.

[taxea]

I used to always use the 1040X as an attachment to the CP response. Then six months after the fact on the last one client got another notice. I called and they said the 1040X was fine, but they assumed it was sent through the regular IRS address. Everything ended OK, but it took more communications then I every want to go through. They did cash the check quickly.

The response should have included the fact that it was not filed but,, was being used as a document to prove your position.

[geekgirldany]

If I need to include a 1040x to use as backup documentation I put "For Reference Only, Do Not Process". Which I am sure all of know already. I recently did this with Georgia including a Form 500 Page 3 and they actually processed it with the wording on it. So some employees do not always pay attention to large highlighted handwriting at the top of a form