I submitted a paper return for 2021 and included a qualified contribution under Cares Act Sectiion 2205 which allows a deduction up to 100% of AGI for qualified cash contributions. I checked the 50/100% box on the contribution and TurboTax Desktop included the annotation on schedule A line 11. However, the IRS reduced the total deduction to 60%. I submitted additional documentation about the contribution to the IRS but the IRS is still claiming a Math Code Error: 180 and reducing the deduction.
I spoke with several IRS agents by phone. One agent verified that deduction should qualify based on entering data [that I provided over the phone] into a separate IRS tax code system. However the agent could not explain why the system reduced the deduction or fix it. Other agents also appreciated the issue but could not correct it.
Since the return was paper filed, the IRS does not have an original copy of the submitted return - only their system version. I suspect the issue is how schedule A line 11 is coded in the IRS system. Another post for 2020 in this forum mentioned this potential issue.
The agents I spoke with suggested several options:
1) Reply with another letter with more documentation on Section 2205, the cash contribution, etc.
2) Go into an IRS service center and speak with a tax law certified representative
3) Submit an appeal
4) Reply to the letter and include a paper 1040X amended return that has the same numbers, but includes the annotated schedule A and supporting documentation. The agent said this paper 1040X would get processed and be fully scanned, so that the "Qualified Contribution Elected" information on schedule A would be accessible to agents.
I am leaning towards option 4) - filing an amended return. If my assumption is correct - that the IRS system has an incomplete schedule A, then the amended return will hopefully fix this and the system will generate the correct deduction.
Does this seem the best approach?
