IRS Error on Applying 2020 year refund to my 2021 tax

[wrschultz_ttax]

The IRS is not including my 2020 refund that I applied to my 2021 payments.  I prepared both returns in TurboTax Premier.  I call the IRS and they said they do not see that a 2020 refund was applied to the 2021 tax return.  They indicated I would need to speak to another team in the IRS.  They gave me a PIN to reference.  However, the wait time was expected to be more than one hour.  It is extremely difficult to reach a person in the IRS to address this issue.  I can mail in my response with supporting documents.  It is not clear the IRS address to use.  The letter head is only IRS Fresno CA with zip+4.  Alternatively to mail in a payment I can use the IRS Kansas City with zip+4.  

Why does the IRS not see my 2020 refund that was applied to "next year" 2021 taxes when using TurboTax?  Why is it so difficult to reach the IRS to discuss an issue?  Which IRS address should one forward supporting documents for a dispute of amount due?  Thanks

[Critter-3]

When did you file the 2020 return and how ?   Did you mail it or efile it ?   Did the IRS process the 2020 return yet ?  

[wrschultz_ttax]

The 2020 tax year filing was submitted by TurboTax eFile prior to the filing deadline in April 2021. The IRS processed the 2020 tax return in or after April 2021.  The return was accepted with in a day of the eFile in April 2021 and there was no further communications.  The 2021 tax year filing was submitted by TurboTax eFile in April 2022.  The IRS sent a letter accepting my total tax liability but indicated I did not pay the full amount.  The difference they calculated is equal to the 2020 tax year refund that I applied to the 2021 tax year filing. 

[Critter-3]

Ok ... time to track down the missing amount.   First look at the return you filed ... form 1040 line 36.

If the amount is on that line then get an IRS account  transcript for the 2020 return ... does it show the amount being applied ?    https://www.irs.gov/individuals/get-transcript

If so then either call the number on the notice or mail/fax  proof of payment (amt applied)  from the return and transcript to the address on the notice.  Always remember the IRS is not always right and to be polite when dealing with the overworked staff. 

[wrschultz_ttax]

Thanks for the help on this. I was able to retrieve my tax transcript after setting up an account.  The transcript of my tax filing and the 2020 transcript of the IRS record shows that I applied a 2020 refund to my next year tax filing.  The 2021 transcript of the tax filing shows the total amount of estimated taxes plus prior year refund.    However, the 2021 transcript does not separate the estimated payments from the prior year refund.  Why are the IRS systems not able to separate estimated payments through EFTPS from prior year refunds applied to the current year tax filing?

I can mail in a response but the IRS only indicates the taxpayer should mail to address on the "first page".  The letter head is the only place showing an address which just says IRS Fresno CA with zip+4.  Is this the reference the IRS indicates is the address to be used?

[Critter-3]

Yes ... seems like an incomplete address but IRS + city/state/zip is all that is needed.  

And actually the amount applied is considered an estimated payment so did you have it entered on the return correctly ?  

[wrschultz_ttax]

Thanks will use this address.

I separately tried to login again the IRS website to retrieve transcripts. Was able to log in but when I request a transcript and supply the pin or code provided by the IRS in an initial call my access is denied.  It was accepted earlier today to retrieve the initial transcripts.  I have the transcript of the filed return for 2020 and 2021 and the transcript of "record" for 2020 but not 2021.  Hopefully the IRS has a sufficient amount of information to review my return and payments. 

[wrschultz_ttax]

The amount entered on line 26 was the total of my estimated taxes and the refund from the prior year.  This was completed automatically by TurboTax.  There is a worksheet on TurboTax that compiles the EFTPS and prior year refund.  I have this in my records.  This is not included in the eFile as I understand

[Critter-3]

It is too early for the 2021 information to be in the system.   Just send a copy of your 1040 + the 2020 transcript ... that should be enough to get them to reverse the incorrect finding. 

[wrschultz_ttax]

Thanks for the help on my IRS issue.  I have put together the needed documents and will send off to the IRS.  Understand a response could be one to two months away.  I am in no rush.  The taxes are all paid, the IRS just needs to understand that.   It is unfortunate to see the IRS is understand staffed.  I tried to make clear all the information so they make a decision.  Again thanks for pointing me to the IRS transcripts.  William

[fanfare]

@wrschultz_ttax 

If you applied an amount to next year (2021) then that amount should appear in your 2021 "Record of Account" statement.

The code is 716.

If it doesn't show, then you should be sending the IRS the 2020 transcript showing that amount.