1040 X - Interest and Penalty

[Florida_EA]

Taxpayer wants to amend the 2022 and 2021 1040 and report additional income. This results in additional taxes and interest and penalties. Can the taxpayer estimate the interest and penalty and pay with the 1040X or wait for a notice and then pay the interest and penalty. Is paper filing efficient in terms of processing time? Or is it recommended to e file as far as processing time is concerned

[rbynaker]

I generally file w/payment of tax and tell the taxpayer to expect a bill for interest/penalty. I tell clients that I bill by the hour so I'm happy to spend my time calculating penalties and interest at my hourly rate but I recommend we let the IRS do it for free.

It's my understanding that the IRS processes e-filed amended returns in the same queue as paper filed amended returns so it might not be any faster. IMO the biggest benefit of electronic filing is to avoid data entry errors from overworked IRS employees.

Rick

[Florida_EA]

Taxpayer prefers to estimate the interest and penalty and pay with the additional taxes in order to pay a minimum amount when recalculated by the IRS. It is my understanding that the form 1040 X does not have any provision or line item where one would include the interest and penalty so the penalty and interest would be a separate calculation.

[terryats]

If your client insists on prepaying interest/penalties, just put them on line 10 other taxes, and open supporting statements box and list them.