Mistake on Taxes

May 31, 2019 9:13 PM

We have a refund coming back for our taxes this year. However, I made an error in claiming a particular deduction that I thought we were eligible for. What is the best way to fix this?

I filed electronically, and it ends up that I put a health insurance deduction in a place where it is only a specialized situation where it can be deducted, and I missed that part. So, I received a letter from the IRS indicating that they need a particular form that substantiates the deduction, as it wasn't included in the filing with the other forms. The kicker, of course, is that I don't have that form, as I missed that was even a thing.

So if I don't have a form or anything to send back to the IRS, what is the best way for me to resolve their request? I imagine that sending a letter explaining what happened is a good next move; but I'm not sure if a 1040x would also be appropriate, or if I wait and see what they say next? Whatever is fine, I just envision this dragging out for months once it's gotten to the "passing mail back and forth to resolve the issue" stage. Is there someone I can talk to in person? Phone calls have never gotten me through to anyone at the IRS.

Also, I've always done my own taxes. This year had more complicating factors. Is this a situation where it might be beneficial to go to a tax professional to get advice on how to best do this?

posted by SpacemanStix to Work & Money (4 answers total)

I think a 1040x is your best move here. That said, I'd try calling them. I've had decent luck getting through to an actual person (sometimes the hold times are long) and then you can just wrap it all up. Since you got a letter from them, there may be an "incident number" (I don't know what it's called, but if you got a personal letter) which may get you into a better hold queue. I know when I had to work out some stuff with them once, this was helpful in getting my question to the proper person.

If you're pretty sure you know what you did wrong, just do them over with the new information. If you wind up owing and not getting a refund, you will (I believe) owe a small penalty on the amount you did not pay but it is usually minor. I'm not sure if you can calculate that part yourself but a penalty would go up the longer it's not paid so I'd just do it, put in the mail, and get it off your plate. I am not a tax person but I've done a lot of wrassling with the IRS and they're usually pretty reasonable especially for honest mistakes.
posted by jessamyn at 9:26 PM on May 31, 2019

Call the phone number on the notice you received. You may have to wait on hold for a very long time because the IRS is underfunded, but you will eventually reach a human who will be able to help you. (Or if you prefer, schedule an in-person appointment.)

Filing a 1040X after you have already received an underpayment or audit notice, without talking to the IRS first, could cause confusion or delay. I would file a 1040X only if the IRS specifically instructs you to do so when you speak with them about your situation.
posted by Syllepsis at 9:37 PM on May 31, 2019

Calling the IRS gets you through to very helpful people -- AFTER hold times upwards of 30 minutes. (I called them 2 weeks ago in the middle of a random weekday.)
posted by salvia at 9:47 AM on June 1, 2019

Thanks for the good advice! I'll start with a phone call and work out from there as needed.
posted by SpacemanStix at 12:22 PM on June 1, 2019