CP2000 Overpaid Social Security

[casey7]

In 2018 my employer had me on two W2's and that caused an overpayment of social security taxes. The online software recognized this overpayment in schedule 5 and applied the amount to what I owed. 

I have now received from the IRS document CP2000 stating I need to pay this amount back. 

Did I do something wrong while doing my taxes and is there a recommendation to clear this up as it would seem the IRS already has this money. 

Any suggestions are appreciated. 

Thanks 

[MaryK4]

The CP2000 notice is a computer generated income matching system (based on information returns it receives from third parties like the W2 your employer gave you).  In general, it looks for specific information in specific places and contacts you if there are any discrepancies.  

In your case, you applied the credit for the overpaid social security to your income tax liability.  You will want to respond to the notice with this information, and if possible provide copies of the W2s that show the total income and social security withheld, and that there were different EINs on the W2.  An IRS employee will check and notify you by mail if the issue when the correction is made.  

See Can I get a refund for excess Social Security tax withheld? and Understanding Your CP2000 Notice.

[casey7]

Thank you for the response. However, my issue is that the EIN's were the same number. The amount over the maximum for social security was recognized by the software and still applied to the amount owed. 

So knowing that the EIN's are the same, does your response change? 

Thanks again @MaryK4 

[MaryK4]

Yes, in this case, you will want to fill out IRS Form 843: Claim for Refund and Request for Abatement according to the Form 843 Instructions and mail it with your reply.  Be sure to write that you were not aware of the proper procedure and request a penalty abatement.  Unfortunately, the IRS may apply the penalty for late filing and process the refund amount separately.

@casey7

[casey7]

Thank you again @MaryK4 

I was actually on the line with the IRS when you responded so the timing was good. However, the IRS states that I would not qualify for a refund with using that form and that I owe the money and that my employer should pay me back. So next call is to the finance department to see what their response is. 

Appreciate the help.