Form 8962 Premium Tax Credit: I e-filed in May; IRS sent me letter requesting copies of 8962 and 1095-A

[Hornswoggled]

regarding TurboTax 2021:

First off, I reviewed the forum about form 8962 before posting. Looks like there were a lot of problems early-on with that form, but I didn't file until mid-May. Hopefully those problems were resolved by then.

A little background: I filed MFJ with my wife using TurboTax. Also filed a separate return for my 23 y.o. daughter. We (as a family) held an ACA policy for the first 5 months of 2021. We applied as a family because at the time, my daughter was in school and counted as a dependent. As 2021 progressed, she cut back school and increased her work, so she no longer counted as a dependent at the end of the 2021 tax year.  Thus, we filed a separate return for her. That means we got one 1095-A form covering the three of us, and it had to be divided between her return and mine & my wife's. 

I have to admit, I was astounded when I saw how we divvy things up for this situation, and the idea ran through my mind that it must be a nightmare for the IRS to reconcile this info from two different tax returns.

Another bit that I found amazing was that you can allocate the amounts from the 1095-A anyway you want between the two different form 8962's, as long as both add up to 100%. So, I ran some various scenarios (different percentages between me and my daughter) and saw our total taxes change dramatically. It was most advantageous for both of us for me to take 0%, and let my daughter take 100%. 

We both e-filed in mid-May. My daughter's return was accepted immediately, and she had her refund in about 10 days. My return was accepted, then showed "processing" for about 3 months. And then, I got the IRS letter last week.

The letter states that 8962 Part II columns a, b, or f don't match my 1095-A. They are requesting copies of my 1095-A and my form 8962.

So, I've gotten those items out to look over. First thing I'll say is that on my 8962, Parts I, II, and III have no entries whatsoever. I believe this is because I took 0% allocation in Part IV. My daughter's 8962 has all the normal entries for Parts I, II, and III. Part IV on both our forms reflects her taking 100% and me taking 0%. Line 30 in Part IV on both forms is filled out correctly, referencing policy number and each other, with SSN's.

If anybody has any comments on this, I'd like to hear them. In particular, did TurboTax fill out my 8962 correctly, leaving Parts I, II, and III blank because I took a 0% allocation? Anybody else heard of this situation? I'm wondering if I just supply what they asked, or add some narrative and highlights to the submitted forms to help clarify?

I have a sizeable refund being held up because of this matter.

Thanks for any input you can offer.

[Critter-3]

Sadly this is a big issue for the IRS to reconcile both returns form 8962  so I would write back with that information on the daughter's return. 

[Hornswoggled]

Thanks for the reply. 

I tried visiting my local IRS office as a walk-in today, but no-go. (I'd make an appointment, but I've had 100% failure to get to a live agent to book the appointment every time I've tried recently.  Was successful once previously as a walk-in, but not today.) Always get the message ". . .due to unusually high call volume . . . try back tomorrow." Also failed in the same manner when trying to call the number on the letter to ask questions. So, I guess I'm reduced to just responding to this letter with what they asked for. I'd like to include the daughter's 8962, but they didn't ask for that and I don't think I can include that without some kind of permission form filled out. They specifically asked for copies of my 1095-A and 8962. Any thoughts on providing some highlights of relevant fields and a narrative of things to help explain it? Or should I just supply what was requested, and nothing more?

[Hornswoggled]

Just a follow-up on this matter . . .

I sent in exactly what the IRS requested from me on 9/7/2022: A copy of my form 8962 and 1095-A (but not my daughter's 8962, which they did not request.) The IRS already had these forms when I filed using TurboTax on May 16th.

I also included a narrative, pointing out various bits of information on my form 8962 which accounted for the split allocations of the Premium Tax Credit between me and my daughter. I also stated the obvious: that since I took a 0% allocation (and indeed, any allocation other than 100%), the numbers on form 8962 Part II columns a, b, and f would not match the numbers from form 1095-A.

Apparently this satisfied them, because I received my full refund on 10/5/22, a few days short of a month after I mailed the response to the IRS, and definitely faster than the 6-8 week time frame they indicated it would take to receive a response.

Only down-side is that I think I was due about 3 months interest for the delays in receiving the refund to my correctly-filed tax return, which should have amounted to around $105.xx.

(Filed 5/16/2022, allow 45 days and then start collecting 4% interest for approximately 3 months (July, August, and September) on an admittedly large, delayed refund of just over $10K.) No idea how I would pursue collecting the interest; probably more trouble than it's worth.

[Critter-3]

The pay interest after they have been processing your return for 45 days however this starts counting once you send in the missing information left off the original return.  So you are not entitled to any interest on the incomplete original return.  

[Hornswoggled]

Point is, the return was not incomplete. The only thing "new" I supplied was a narrative of the information already provided on the existing forms previously e-filed. 

That being said, when I saw what they had to do with the 8962 form to reconcile the Premium Tax Credit, and that data on a single 1095-A might be spread across multiple tax returns for different individuals in some cases, it is a tough one to efficiently check. Still though, they did have the ACA policy number and my daughter's SSN on my form 8962, so they could have reconciled it without any input from me.