So I procrastinated and sent off my 2024 tax return in April of this year by mail. No big deal, was expecting a $1212 refund so no worries. Only interest and penalties of you owe money, no rush if you’re getting a refund.



Had a letter from the IRS waiting for me when I got home from my cruise on Aug 1 saying that instead of my expected refund, they would really appreciate if I sent them an additional $2800ish at my earliest convenience. The reasoning they provided is they added $27,475 of additional income to my return.

So once the shock wore off and I gathered my documents and double checked everything, I decide to give them a call.

After 12 unsuccessful attempts, going through 3 minutes of keying in all the relevant info so I could be transferred to a representative, my calls were harshly disconnected with a “We are busy right now, try later or tomorrow”


Finally on the “lucky” 13th try, I was actually placed in queue for the next available representative with an expected wait time of 15-30 min.

One hour and 53 minutes later (no exaggeration) I was connected with “Representative 1000682654389” (not her actual number but really that long).

I explained the situation, she took my info to confirm ID and ask me to hold while she pulled up my file. Thankfully, that was only about 4 minutes.

She was able to explain that the income was “corrected” because of the amount on Line 4b (pension distributions). Their “e-filed” return showed a Line 4b entry of $27,475. Now my PAPER copy showed that line as blank. The Line 5b amounts were correct at $27,476.

So somehow almost that exact amount got duplicated in the IRS version on 4b.



So considering the following…

I KNOW I filed paper by mail in April just before the 2026 taxes were due, FreeTaxUSA wouldn’t let me e-file as the taxes were so late.

I KNOW line 4b was blank on my paper return, I have the PDF that I printed the return from saved.

The IRS Rep got borderline crabby with me when I continued to say I mailed my return, saying she sees it marked as being e-filed. With a DCN from June 11th (Document control number?). When I asked if they may scan or digitize paper returns, she emphatically said it was e-filed (it wasn’t though… ) I even confirmed through FreeTaxUSA that it wasn’t e-filed.


I can understand her being short, probably has people crabbing on her all day (I made a point of being nice the entire time though). Once we got past the paper/e-file issue she was very helpful and was quickly able to get to the calculation error.

With that figured out, the Rep talked me through the process of filing a 1040x corrected return and I was able to do that after ending the call.



Here are my questions I am hoping someone can answer…

1. How does the IRS process paper returns? I can’t believe they keep them on paper, and it would seem silly to have people keying in the data (and make potential mistakes) when scanning and OCR is pretty reliable, especially with computer generated forms vs handwritten entries.

2. Any theories on how this error (on the IRS’s part) would have happened?



I’m glad it seems to have been relatively easy to resolve (assuming I actually get my refund in the promised 16 weeks or so) but I’m just really curious where the glitch came in.

Fed161 might chime in to answer your questions.

Hope that it’s fully sorted and done.

Glad I have a good tax guy.

Fed161 worked for Social Security, not the IRS.

After the first and only time I was audited by the IRS, I said I would never deal with that org again. I hired a CPA and have been using her since. If I have an issue, I pay her to deal with it. It is worth the money to me.

I don’t have much helpful information, surprised you got through to someone mildly helpful. I can imagine getting 10 different answers from 6 different employees.

The few times I’ve received a nasty-gram from the IRS or State, I did my best to rectify it without talking to anyone.

The most recent, 7 or so years back, was from the State. My son was not a resident of this State anymore, they wanted tax $$ when I moved $$ to pay for college. The account was tied to his SSN.

I sent a letter showing his return for the other State & said my next correspondence sent would be from an attorney, they went away.

The general recommendation all over the internet is to efile when possible because there is much less chance of a data entry problem compared to paper filing. Whether scanning or human entry, idk, but it is a thing.

Be sure to document your phone call in case the IRS sends more demands for payment or tries to charge penalties and interest. Our issue a few years ago showed there is no reliable record kept in the IRS of what they said or even of their written correspondence.

In the future, I recommend recording phone calls. Partly CYA if they don't abide their own assertions, and partly that you can review exactly what they said in case it becomes complicated.

quote:

In the future, I recommend recording phone calls. Partly CYA if they don't abide their own assertions, and partly that you can review exactly what they said in case it becomes complicated.

Be sure to tell the IRS you are recording the phone call for quality control and training purposes.

quote:

Their “e-filed” return showed a Line 4b entry of $27,475.

You could have asked her to pull up the 1099-R supporting that entry (there would be none).

To my knowledge, line 4 is IRA Distributions and line 5 is Pensions and Annuities (2025 Form 1040).

quote:

2. Any theories on how this error (on the IRS’s part) would have happened?

IRS makes many mistakes but the most common problem is in all 1099's as well as 1099R's. I would not ever file a 1040X without determining what is in your IRS file. Any CPA, Tax Attorney or Enrolled agent can get that info with a Power of Attorney for IRS records. Email sent.

quote:

Originally posted by 229DAK:

quote:

In the future, I recommend recording phone calls. Partly CYA if they don't abide their own assertions, and partly that you can review exactly what they said in case it becomes complicated.

Be sure to tell the IRS you are recording the phone call for quality control and training purposes.

lol! A great way to start the conversation with the IRS.

My iphone has a message that plays if I'm recording the call to inform the other person it is being recorded. BS but there's no disabling it. My state does not require consent to record.

quote:

Originally posted by sourdough44:
… The few times I’ve received a nasty-gram from the IRS or State, I did my best to rectify it without talking to anyone…

That would have been my preference, but since the letter had no other info other than “We think you made $27,475 more than you think you did” I needed to figure out where they got that number from.

quote:

Originally posted by Fly-Sig:
The general recommendation all over the internet is to efile when possible because there is much less chance of a data entry problem compared to paper filing. Whether scanning or human entry, idk, but it is a thing.

Be sure to document your phone call in case the IRS sends more demands for payment or tries to charge penalties and interest. Our issue a few years ago showed there is no reliable record kept in the IRS of what they said or even of their written correspondence…

I usually do e-file, problem is as the new tax year approaches at some point FreeTaxUSA no longer allows e-file for previous year. Not sure if it is specific to them or all online filing programs.

Definitely took notes on date/time of the call and the Rep ID number.

quote:

Originally posted by 229DAK:

quote:

In the future, I recommend recording phone calls. Partly CYA if they don't abide their own assertions, and partly that you can review exactly what they said in case it becomes complicated.

Be sure to tell the IRS you are recording the phone call for quality control and training purposes.

quote:

Their “e-filed” return showed a Line 4b entry of $27,475.

You could have asked her to pull up the 1099-R supporting that entry (there would be none).

To my knowledge, line 4 is IRA Distributions and line 5 is Pensions and Annuities (2025 Form 1040).

Hmm, didn’t think about recording the call, wonder what they would say.

I did take good notes, and once she told me about the 4b entry (correct, Taxable amount on 4a IRA Distributions). Seemed to be an obvious error. Anyone with a lick of sense would realize if total IRA Distributions (4a) was $8000, a “taxable” amount of $27,475 seems “off”.

Also, there not being a 1099 for that amount should have been a clue to double check if accuracy was an actual concern.

My guess is they figure do as little as possible if the error means demanding money. Make the taxpayer do the work instead or just hope they’ll send the check without question.

quote:

Originally posted by Anush:

quote:

2. Any theories on how this error (on the IRS’s part) would have happened?

IRS makes many mistakes but the most common problem is in all 1099's as well as 1099R's. I would not ever file a 1040X without determining what is in your IRS file. Any CPA, Tax Attorney or Enrolled agent can get that info with a Power of Attorney for IRS records. Email sent.

Email received and really enjoyed our conversation. Thanks for the kind offer, I’ll let you know what happens next.