excise tax calculation wrong

[Kimberly S]

Client is under audit by the IRS. As part of the process, the auditor sent a letter requiring the client to prepare, file and pay am excise tax on testing refunds that were not made timely. The client prepared and filed the forms using the auditor's numbers. However, the auditor's numbers are about $5,000 higher than the actual test results.

Is anyone aware of a way to file an amended return using the correct numbers and receive a refund of the overpayment? Does the instruction from the auditor overrule the correction?

[Laura Harrington]

Client is under audit by the IRS. As part of the process, the auditor sent a letter requiring the client to prepare, file and pay am excise tax on testing refunds that were not made timely. The client prepared and filed the forms using the auditor's numbers. However, the auditor's numbers are about $5,000 higher than the actual test results.

Is anyone aware of a way to file an amended return using the correct numbers and receive a refund of the overpayment? Does the instruction from the auditor overrule the correction?

The Form 5330 Instructions explain how to file an amended return and claim a refund/overpayment. A copy can be found at www.irs.gov.

I cannot speak as to whether or not the instructions from the auditor overrule the correction. I think the actual test results, and resulting refunds, need to determine the excise tax amount. I would question the auditor as to how he/she came up with their numbers. The auditor may have discovered an error in the test that was completed or the auditor may have done the test incorrectly.

[Kimberly S]

The auditor used the results of a test prepared by the prior TPA that included only 8 months of data, not the full year.