Multiple Errors on 2009 Return

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.

Reply to
Larry Israel
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When you say to sent a revised Form 1016 (I assume you meant 1116) and

1040, do you mean you sent an amended 1040 using Form 1040X or did you just send another 1040 with different numbers?

The proper method is to use the 1040X, with the 8833 and revised 1116 attached. The second page of the 1040X is where you would have entered the reason for amending.

In the upper right corner of the letter you received there should be a reference number, the name of the IRS person handling the issue and his/her phone number. I would call that person and ask why the IRS did not act on the revised 1116. I have generally found that these IRS representatives are very helpful in resolving the issue and informing you exactly how to go about resolving it. It may be as simple as a

1040X with the revised 1116 or they may have just overlooked it.
Reply to
Alan

Also of note: This probably came from one of the service centers (or "campuses"). Personnel there often do not udnerstand complex situations such as yours. You should appeal.

Reply to
D. Stussy

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