Form 843 logistics

[cmy28]

My tax return (claiming refund) was rejected and I was assessed penalty charges for that. I went to the local IRS office and they told me to file form 843. I now have two questions:

1. Should I file one or two forms 843 for the tax and the penalty directly associated with it? The penalty shows up in my IRS account under the original tax year, though it was assessed after the rejection of the tax return.

2. Should I include interest when claiming a refund using form 843? If so, from when and till when? (eg., from 45 days after the original due date of the tax return, till the date I fille 843?)

Many thanks!

[Mike9241]

one 843 for everything for any single tax year.   whether interest can be abated depends on the facts and circumstances.  for example, you are charged an underpayment penalty. you ask for abatement because you have reasonable cause. the IRS can abate the 2210 penalty but not the interest.   If the iRS imposes the same penalty but is in error in that you don't owe the 2210 penalty then both the penalty and interest will be abated

[cmy28]

Thank you very much.

If I make multiple claims in one form 843 (for the same tax year, as you suggested), and if the IRS does not approve of everything, will they reject the form altogether or could they approve part of the claims?

In addition to penalty, I will also try to reclaim the rejected tax refund in form 843 (not income tax). Should I include interest for that tax?

[cmy28]

Thank you very much.

If I make multiple claims in one form 843 (for the same tax year, as you suggested), and if the IRS does not approve of everything, will they reject the form altogether or could they approve part of the claims?

In addition to penalty, I will also try to reclaim the rejected tax refund in form 843 (not income tax). Should I include interest for that tax?

[Opus 17]

"Reject" is the wrong word.  When you e-file, a "rejection" means the return failed a basic check of some kind (like, if you have form 8949, you must also have schedule D; or social security and birthdate matching).  Once accepted, the tax facts in the return are separately evaluated.

For 843 is a generalized request for a refund of any tax, fee or penalty that is not an income tax.  You file one form for the whole year (2022, 2023, or whatever) that lists all your claims for that year.  It must be printed and filed by mail.  Attach/provide a detailed explanation of each claim, and be sure to include any required documentation for each claim, based on the instructions.

The IRS should evaluate each claim on its own merits, as long as you provide a good explanation for each separate claim, with proper supporting proof. 

[cmy28]

Thank you very much. I appreciate that.

It should have been that my claiming of a tax refund was denied (instead of the word "rejected") and the IRS office told me to file 843 to claim it again with additional supporting documents.

The tax amount is large and the IRS took a long time before eventually denying the original tax return. If refunded normally, it would have accumulated a large interest as well. 

Would it be legitimate for someone to claim interest on a tax claimed using form 843?

[Opus 17]

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@cmy28 wrote:

Would it be legitimate for someone to claim interest on a tax claimed using form 843?

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No.  The IRS is often required by law to pay interest on refunded amounts.  For example, if a tax refund is paid after the April 15 deadline and more than 45 days after the return is filed, the IRS pays interest.   If interest is owed by law in your situation, the IRS will pay it automatically.  If interest is not required by law in your situation, they will never pay no matter how eloquent you are.  Just claim the amount of tax or penalty that you want returned.  

[cmy28]

I see. Interest should have been paid if they refunded it to my tax return. However they denied it and I now claiming it again by form 843.

Suppose my claim in form 843 is approved (of the original tax amount), would you think they would still add interest automatically (to the tax amount, not the penalty) given that it's a 843 not a tax return?

[Opus 17]

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@cmy28 wrote:

I see. Interest should have been paid if they refunded it to my tax return. However they denied it and I now claiming it again by form 843.

Suppose my claim in form 843 is approved (of the original tax amount), would you think they would still add interest automatically (to the tax amount, not the penalty) given that it's a 843 not a tax return?

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See this link.

https://www.irs.gov/payments/interest#pay

It also looks like the IRS does advise you can ask for interest.  This will at least get your request on the record and document your reasons and calculations.  However, I would not expect them to pay it unless it was one of the items where interest is authorized or required.

[cmy28]

Right...So it seems that I could indeed calculate the interest and put it there in my form 843, right? 

As mentioned before, interest would have been required if my original tax return was not denied.

As long as they consider each item (tax, interest, penalty, etc.) separately, in the worst scenario they could just say "no" to the interest, but would still evaluate the tax item separately. Does this plan seem reasonable?

[Opus 17]

@cmy28 

As far as I can tell, that sounds reasonable.  Try and use the correct interest rate, it is set by law, it is variable, and changes quarterly.  See here, use the rate for "non-corporate overpayment".

https://www.irs.gov/payments/quarterly-interest-rates