We submitted our 2020 tax return via efile (turbo tax) and expected a refund. The IRS discovered there was an error with the stimulus calculation and informed us we had a balance due of $2k. We recalculated our return and determine we should only owe the IRS $100. We sent them a letter explaining this and also included a hard copy of the new tax return plus the $100 check payment. The check was deposited, shortly after we received a letter demanding the original amount due of $2k. It appears that it may have been crossed in the mail. My question is, not wanting to confuse things more, should we e-file an amended return via Turbo tax software or should we address it by responding the payment demand letter? Thank you
"We sent them a letter explaining this and also included a hard copy of the new tax return "
This is not the correct procedure for fixing errors.
IRS will not process a second Form 1040, revised or otherwise.
The correct process is to submit amendment on Form 1040-X.
Form 1040-X becomes your new tax return.