Thanks for your response and suggestions.
I don't disagree that the problem lies somewhere in IRS forms and instructions. They provided detailed steps and a specific form on how to tax the excess contribution but not on how to correct it. I've spoken to a number of IRS representatives and none of them could tell me how to address this issue so I mailed all my forms and a detailed letter of explanation. Just yesterday I received a response from them which is essentially - "Form 8889 line 2 is zero, so you can't put more than zero in line 13 and hence you don't get a deduction".
I also believe that TT should have a validation on the mismatch to catch this problem quicker, so that the filler is aware and attempts to correct it prior to filling their taxes.
