On my 2009 return I never got, or mislaid, a 1099-INT. As I am a resident of a country with which the US has a tax treaty exempting Social Security payments to a resident of the other country, I did not list my payments nor file a Form 8833. I also miscalculated my foreign income tax credit, making it smaller than it should have been.
Uncle Sam caught me and sent me a letter asking for money for the interest income and the Social Security. Since my income had changed I had to recalculate my form 1016, and found that I had omitted a step that would increase my foreign tax credit. I therefore answered their letter with "I agree to some of the changes." I enclosed a cover letter explaining what had happened, the missing Form 8833, a revised Form 1016 and 1040, and a check for what I calculated was the correct underpayment plus interest.
Now I get another letter which accepted my explanation of the Social Security, but paying no attention to the change in the foreign tax credit. They asked for more money over and above what I had sent in the reply to the first letter. They only mention the increase in income and income tax because of the omitted interest payment. Now here is my question -- should I answer this letter saying that I agree with none of the changes, since they just repeated the part about the interest not reported, or should I say I agree with some of the changes since they repeated the part of the interest but didn't mention the foreign tax credit.
In other words, should I be agreeing with the changes since the original
1040, in which case I am agreeing with some of the changes. Or should I be disagreeing completely, as I think that my answer to the first letter was correct?I seem to be a walking advertisement for people not to do their own income tax calculations.