I called the MN Department of Revenue and explained the situation to the rep. Here's what I was told to do: Since my total withholding (before penalty) exceeds my tax due and thus I am due a refund, I should not submit Schedule M15 and remove the underpayment penalty from Form M1. That's what I did and I got my refund with no underpayment penalty and no additional information was requested from me.
Is that actual policy or just some thing that the rep knows works? I don't know. So buyer beware. I am not recommending this, just sharing what worked for me.
