Thanks for this clarification. I have been there (last year), and it's not as bad as I anticipated.
My wife and I are long-term Turbotax users and have put 3 children through college using 529 plans. In 2018, my wife received two 1099-Q distributions that were for qualified tuition payments for two of our children. When I filed our joint 1040 form in March 2019, we did not report the distributions, as recommended by Turbotax.
Five months later, in September, I received a notification from Turbotax about a notice from the IRS. It was a bill (CP2000 Notice) for extra taxes on the 1099-Q earnings (those reported in box 2). The letter provided some contact information, but only vague instructions on how to respond if I disagreed with the extra tax assessment. I spent a few hours collecting documentation showing that the distributions were offset by even larger tuition payments that we had made for our childrens' education (and reported to the IRS in 1098-Ts issued to our children). I then phoned the IRS help-line and got a very helpful agent after a modest wait (less than 20 minutes). After listening to my story, the agent reassured me that I probably did not owe extra taxes and instructed me to write an affidavit simply stating why I disagreed with the proposed additional taxes, and mail it to his attention at the IRS Service Center (this was because he happened to be at our regional IRS service center).
Less than a month later, we received notification that the CP2000 notice was resolved and that our tax bill had been returned to that in our original filing.
