I got referred to a taxpayer advocate, who sent a letter closing the case without ever speaking to me, claiming that the issue was that we didn't report my original refund amount and that is why we owed money. I think this is the most accurate reason ... amending to combine 2 separate returns is not easy and the program will not do it automatically. You needed to use the downloaded program so you could make direct line entries on the 1040X (or complete it manually) so missing your original refund was most likely the error the IRS caught.
My whole argument is that since we both individually settled our 2020 taxes, the only way that any money is owed in either direction is if our total tax liability changed by switching filing status. So, I poured over all the numbers and believe that I finally found the source of the change:
When covid hit in 2020, my employer was able to stay open, but my hours got cut back. Some of this reduction in work was covered by unemployment benefits. On my individual return (Sched 1, line 8), there is a UCE credit for $10,200, that is not found on the joint return. Looking into the eligibility requirements for that exclusion, our combined AGI crossed the $150k threshold, and made me ineligible. YEP ... that is another reason that filing jointly could hurt.
So, unless I am missing another option, I either need to pay the back taxes and penalties on that $10,200, or amend the return back to MFS and deal with fixing the ineligible Roth contribution. Sorry ... this is no longer an option once you amended to switch from MFS to MFJ after the due date of the original return. I highly recommend you talk to a local tax pro if you cannot see what happened.
