IRS only applied some of 1040X changes, and no letter of explanation. Now what?

[NewYorkTaxpayer]

My fiancee filed her 2020 tax return last year on time, but prior to the changes that were issued in regards to UCE.   She received just under $10K in unemployment during 2020.  The change that was made exempting unemployment income resulted in her becoming eligible for the EIC, and Form 1040X was filed.   As a result of the changes that were made, the 1040X reflected these changes:

Lines 1, 3, 5: AGI reduced by the amount of UC due to change in Schedule 1
exempting up to $10,200 in unemployment compensation for 2020.
- Line 6: Tax amount reduced due to decrease on Line 5
- Line 7: Credits reduced to prevent credits from exceeding total tax
- Line 14: Due to above changes, EIC credit taken based on now meeting
income thresholds for eligibility
- Line 15: Due to above changes, child tax credit restructured and return
now includes Schedule 8812.

In July 2021, the IRS automatically issued an EFT refund for her total tax liability (Was around $200, so they refunded her that plus some interest)

Then -- the 1040X was sent to an additional reviewer for the other changes.  In December 2021, the IRS issued a paper check for ONLY the EIC (Line 14 above).  HOWEVER, they completely disregarded the changes resulting on Line 15 and the included Schedule 8812.  As a result, the total amount of her refund is still short by $981 plus interest because with the change in AGI, the full amount of her child tax credit became refundable.

Compounding the issue -- I spent 4 hours on the phone with the IRS this morning,, In December, while she DID receive the check with the refund for the EIC, she never received the letter of explanation from the IRS on the changes that were made.  According to her transcript, this was mailed on 12/20/21, but it was never received.  According to the representative we spoke to this morning, there is no way to request a copy of this letter be sent again (????)

At this point, we're not sure what to do.  The IRS agent said we could re-submit the 1040X again, since the chances of it being reviewed by the same reviewer are slim -- but he was not clear in how we should go about reporting that.  I suspect we would have to switch over to doing things manually now, since the original return and amended return were done in TurboTax, and TT has no idea that the IRS only honored part of what was requested on the 1040X.  If we were to submit a 2nd 1040X manually, I have no idea how we would attach the appropriate supporting documentation.

Any help or advice would be appreciated.

[JillS56]

Yes, I would file another 1040X.   On the 1040X in the section that asked about what you have received, report what you have received in total the $200 and the amount of EIC received.   This should show that you are still owed the $981.  

You should be able to do this in TurboTax by overriding amounts if it does not correctly report them.   You might not be able to e-file the 1040X, but you should be able to prepare it through the program. 

• Lines 1 through 12 of the 1040X should be the same as previously submitted.
• Line 13 should only have an amount if you had something on this line previously otherwise leave it blank.  
• Line 14 would be the amount of EIC you received.
• Lines 15 and 16 should only have something on them if you had something on them previously, otherwise leave it blank
• Line 17 total of lines 1 through 15, Column C plus Line 16.
• Line 18 should be the total over everything she has received today, any original refund, the $200, and the EIC.
• Line 19 should equal the $981 that you calculate as still being owed.
• Line 20 is should be blank.
• Line 21 and Line 22 should show the $981.
• Part III you will need to provide an explanation as to why you are filing the amendment.   Just something to the extent that after removing the unemployment the amounts of EIC and child tax credit changed and the amendment is to claim the remaining balance owed per the amended return.

You may or may not be able to e-file this return.   If not, you will have to print and mail it in.   If you have to mail the form, make sure you provide a copy of the additional child tax credit Form 8821.