[mafalo1989]

If a person files an original return and receives a refund and subsequently files a 1040X and owes do they have to pay back the original refund + the amount owed after changes? Also, does the payment need to be sent right away? For example, lets say they originally got in a $5k refund but they did an amendment and they ended up owing $250, do they have to pay back the $250 or the $5,250. After the amendment it’s basically like they should have never received a refund at all right? And as far as I knew they’re supposed to send that in ASAP right?

I have this older lady that forgot a ton of info when she brought in her tax stuff arguing this with me by playing phone tag so I just wanted to check my facts as much as possible before she calls back again. Somehow it’s my fault that she forgot to bring in paperwork that I had know way of knowing about but whatever…

FAR- 7/14

AUD- 8/31

REG- 11/10

BEC- TBD

[Juice23]

I misread your question. Forget I said anything at all…

AUD - NINJA in Training
BEC - NINJA in Training
FAR - 78
REG - NINJA in Training

BBA, MA, MA.

"Philosophy is a battle against the bewitchment of our intelligence by means of language." - Wittgenstein

[Tncincy]

The person will pay what they owe on the amended return. And any fees the IRS assess them with which would be indicated by correspondence. The amended return is to correct any information included or excluded on the original return. So the client was over paid $250.00 according to the amended return. They should send in the owed amount with the amended return. If not, the IRS will send them a notice of what is owed with any additional penalties (if necessary).

It begins with a 75
Been here too long as a cheerleader.....time to pass

It begins with a 75
Been here too long as a cheerleader....ready to pass

[mafalo1989]

@Tncincy Ok, so the 1040x says that they owe the refund they originally got plus the $250. So am I right in telling her that she needs to send the full $5,250 as soon as possible to avoid potential penalties? That's what I've been telling her and she keeps calling me back and telling me I'm wrong and I can't get a response from my manager as to what to tell her or what to do about the situation. It's been going on with me telling her she needs to pay the amount of the refund plus the additional amount and she keeps calling back and saying she's never had to pay amounts due when she's sent amendments in, that she's always sent amendments in and then waited for the IRS letter to tell her what to owe. I've been trying to explain to her that they're going to tell her to pay the refund + additional, I don't know why she thinks that amount will change and if she waits for them to process it and send her a letter that's 16 weeks of penalties she's racking up. I'm not sure what she's done in the past, she's a new client and we only require the previous 2 tax returns and she hasn't had to file an amendment in the past but the way things were explained to me is that in order to avoid the penalties they need to send it ASAP. She just interrupts me and keeps telling me she doesn't want to pay the refund back because she has twin grandbabies due any time now and needs the money to help out with them, like it's my fault that she didn't bring in multiple documents that she had sitting around literally with her other tax stuff and she knew about and just “forgot” to bring them in until the end of September (even though she's been into my office like at least 4 times since she filed the original) and it's my fault she took and spent the refund and it's my fault she now as to pay the refund and additional back. Sorry for ranting a little but jeeze… it's October already and I'm a little fed up with taxes and I'm a lot fed up with being yelled at like it's my fault that these people aren't responsible and forget tax documents all the time. I literally had someone threaten violence against me because they forgot Obamacare forms and now this lady who seems to have a timer and knows the exact second I'm out of the office so she can leave me long voice mails telling me I'm wrong and all the other crazy people.

FAR- 7/14

AUD- 8/31

REG- 11/10

BEC- TBD

[Recked]

Yes, if someone files and receives a refund they owe back the refund plus the additional tax.

Lets say she received a refund of $5000, but instead she should have owed $250.
She needs to repay the total 5250.
The amended 1040 will show the actual tax due on the corrected return, and the 1040x will show the actual difference between original and amended and what the client owes in total.

It's not your job to tell her when to pay, you can only advise that she should pay.
If she wants to file and wait for the IRS to send her a letter that's her problem.
Nod and smile and charge her for all your time so you never see her again.

Be aware that many people understand the system and how to manipulate it. She may have forgotten documents, or she may have intentionally not brought them in so she would qualify for the EIC and get the large refund.

Memento Mori - Kingston NY CPA & EA (SUNY Albany 2002)

FAR-93 11/9/17 (10wks, 250 hrs, Roger 1800+ MCQs, Gleim TB 600+MCQs, SIMs)
AUD-88 12/7/17 (3 wks, 85 hrs, Roger 1000 MCQs no SIMs hail mary)
REG-96 1/18/18 (6 wks, 110 hrs, 1400 MCQs, no SIMs)
BEC-91 2/16/18 (4wks, 90 hrs, 1240 MCQs)

[mafalo1989]

Looking at the 1040x has the original total tax at around $7k and they incurred a little under $9k when the new documents were brought in and it came out with a total $16k.

Line 12 has around $10k that was originally withheld and around the top end of $5k withheld when the new documents are brought in. The difference between the $16k and $15k total amounts is on the upper end of $250.

Line 18 has the overpayment, if any, as shown on original return blah, blah, blah and the amount is the amount of her refund, the $5k. That $5k is subtracted from the total payments of $15k to get line 19 and then you subtract line 19 from the $16k to get what is owed. What is owed is the $5k + $250 and what needs to be paid right?

I feel so stupid asking this but this lady has been going after me for days now. She says the amount is wrong and she doesn't have to send anything in but looking at line 20 it says the amount she owes is $5,250 and as far as I know she needs to send that in with the amendment.

FAR- 7/14

AUD- 8/31

REG- 11/10

BEC- TBD

[lam2848]

Line 20 will be the total amount she owes. The refund that she previously received should be included in the amount owed. But like ReckedRacing said, you can't force her to pay her taxes. If she wants to wait then she wants to wait. Either way, she will have to pay it.

FAR - 78

AUD - 75

BEC - 83

REG - 82

[mafalo1989]

Thanks @ReckedRacing I keep telling this woman that and she keeps telling me I'm wrong and she shouldn't have to pay that much and she doesn't have to pay until she gets the letter and she wants the money to spoil her grandbabies. I'm trying to save her penalties. I forgot to mention that she also told me in one message that if she pays that full amount now she'll incur penalties and that she'll pay less in interest and penalties if she waits for the letter. I have never in my life seen anything dealing with the government where waiting to pay causes you to pay less in interest and penalties. I have no idea where she's getting this information from but she's wrong and making me doubt myself. I've told her the same thing in different verbiage like 6 or 7 times now and I offered to sit down and meet with her and go line by line down the 1040x and her original return, she won't meet with me and I'm 99% positive she sends me straight to voicemail when I call so I can't do anything other than talk to a voicemail.

FAR- 7/14

AUD- 8/31

REG- 11/10

BEC- TBD

[Tncincy]

well we know who knows (IRS). Let her go to a local irs office and file a 1040x and let them tell her.

It begins with a 75
Been here too long as a cheerleader.....time to pass

It begins with a 75
Been here too long as a cheerleader....ready to pass

[mafalo1989]

Lol I wish I could, unfortunately my job requires that I initiate the phone calls and then bring the client on the line in order to avoid making the client avoid the inconvenience of being on hold for an eternity some times and even then I'm sure this lady wouldn't want to hear what they were saying and would tell them they're wrong too.

FAR- 7/14

AUD- 8/31

REG- 11/10

BEC- TBD

[Recked]

without seeing the documents its hard for me to confirm the 1040x is correct, but i have been through this multiple times with clients.
no one likes having to pay back the refund plus the additional tax that was due. it would have been much easier to handle up front.
I would send her the amended tax returns, mailed with some type of proof of delivery.
it's the clients responsibility to mail the 1040x and pay the taxes owed.

just double check all your numbers and with holdings on w2, 1099's etc.
you really don't want to have this escalated to your manager/boss only to find out you missed something.
i assume you transferred all original numbers for both fed and state if applicable before you started amending the numbers? most software takes care of this for you automatically as long as you check the appropriate boxes.

can i ask what documents she failed to give you the first time around, and should you have noticed these were missing compared to the prior 2 years of tax returns?

Memento Mori - Kingston NY CPA & EA (SUNY Albany 2002)

FAR-93 11/9/17 (10wks, 250 hrs, Roger 1800+ MCQs, Gleim TB 600+MCQs, SIMs)
AUD-88 12/7/17 (3 wks, 85 hrs, Roger 1000 MCQs no SIMs hail mary)
REG-96 1/18/18 (6 wks, 110 hrs, 1400 MCQs, no SIMs)
BEC-91 2/16/18 (4wks, 90 hrs, 1240 MCQs)

[Grinny86]

If the amended return was done correctly is should show the original amount refunded on the return, so in that the amount owed of 250 would be the correct amount. Usually with amended returns people will have paid money in and will get a refund. I would tell you to look at your return to see if the amount refunded shows on the amended return and if it isn't then you would be correct in that she would owe the refund plus the 250. If it is on there then she would owe only the 250.

AUD - 76
BEC - 77
FAR - 77
REG - 77

Grinny86

[Author]

Replies