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Level 2

Contributed to IRA and SEP IRA, IRS isn't accepting that, can I undo the SEP contribution?

I made a mistake filing my taxes.  I'm self employed and contributed $2309 to my SEP IRA, then I also contributed $6500 to my IRA and my wife contributed $5500 to hers.


We got a letter today saying we owe an additional $3870, due to the fact that they aren't allowing the $12000 claimed on line 32 of our 1040 as I'm an active participant in the SEP.  My question is, can I undo the $2309 SEP contribution instead (form 5329 I think, which I think will cost me $742), so I can still claim the $12000 deduction from the IRAs? 


Alternatively, am I misunderstanding what I did wrong?