IRS reports error on Forms 8801 and 6251

[JimS_83]

The IRS sent a letter adjusting my tax year 2021 Credit for Prior Year Minimum Tax (Form 8801).  Their message says "Some credits are limited to the difference between your tax before credits and tentative minimum tax from Form 6251, Alternative Minimum Tax - Individuals.  You either didn't apply the limitation to your credit or it was applied incorrectly."  AMT and the credit for prior year AMT are both calculated automatically by TurboTax, but I manually followed the instructions for Forms 6251 and 8801 to double check and couldn't find any place where TT deviated from the IRS instructions.  I also requested transcripts of my 2020 and 2021 returns and verified that the numbers the IRS has both years match what my tax returns have -- except for the final result calculating the credit on Form 8801.  Unfortunately, the IRS transcripts don't cover every line and don't provide any detail on their 8801 calculations.

I have two questions:

1) Does TT have any information about a problem with Form 8801 (or 6251)?  I did not finalize and e-file until after the forms were officially available (late March), and I've updated regularly and see no change in the numbers.  Plus, as I said, I manually checked and TT seemed to be doing everything correctly.

2)  Assuming there is no correction from TT, what is the best way to modify my return for tax year 2022 when it comes to the credit carryover from this year?  Since the IRS altered the 2021 credit, the amount carried over for next year will also need to be different.

I can send a copy of my tax file if that would help.  Thank you.

[Mike9241]

the 8801 is the calculation of the allowable AMT carryover.  some years ago Turbotax messed up on the calculation making the amount shown as a carryover way too high. this may be your situation.  The IRS did not do anything about the incorrect carryforwards until recently even though the carryover has been wrong for years. OPs have had this issue too for the reason stated above

you do realize this is a public forum and identity thieves would like nothing better than to get a copy of your return. 

your options 

1) pay the bill

2) contact a tax pro to review your returns, they may require returns going back years

3) use the Audit Defense service provided by TaxResources, Inc., also called TaxAudit.com, in partnership with TurboTax. If you paid for Audit Defense and you received a notice, call TaxResources, Inc. at 877-829-9695, or report your notice on their website at http://intuit.taxaudit.com/. Do not contact the tax agency until you have spoken to TaxResources. They may contact them on your behalf.