Applying part of a refund to amended return?

[equinecpa]

I just finished preparing a 2007 1040 return and while at it discovered that in 2006 the client had claimed a $2000 child tax credit they weren't entitled to. If I mark $2000 of the 07 refund to apply to next years taxes and then file the amended return with a letter to use that $2000 as payment, will it happen? Or will the IRS want to exchange checks.

[myerstaxes]

I think you are saying

that now your client will owe $2000 for 2006 due to error...and that the 2007 has at least a $2000 credit on it that you want applied to 2008 taxes as an estimate...If you mark the 2007 refund for 2008, they cannot move it to 2006...Also, if the 2006 1040X and 2007 1040 are filed at the same time and you do not mark that 2007 refund for 2008, it still may not catch the 2006, since 1040X's are processed slowly and in a different Unit than current year returns...Probably best to pay the 2006 1040X at the same time you file it...

[Bucky]

I would just file 2007 now get the refund and then file and pay 2006 amended. The extra interest for waiting 2 weeks to file amended will me minimal. Of course if the taxpayer has the money to pay now fine.