Tax Penalty

The ES penalty is based on the original tax assessment unless the amended return was filed for the purpose of amending the filing status from married filing separate (MFS) to married filing joint (MFJ). See Revenue Rulings 83-36 and 80-355.

Condor

I think estimated taxes are against a specific period and need to be remitted w/ IRS by a specific date. If you do not pay enough by the due date for each payment period you may be charged a penalty even if you are due a refund when you file tax returns (final or amended).

The penalty should be based on the amended return. If the reason there would be no penalty is because of the refund being applied forward from the 2005 amended return, you are out of luck if the refund check was cashed. I always advise clients to void the refund check and send it back with a letter asking that it be applied forward. If however there would be no penalty because of a safe harbor, then you should write and request abatement of the penalty.

For which year?

So is it 2005 for which the penalty is charged, or 2006?

Was using the refund for 2006 the thing that caused there to be no penalty for 2006 based on the amended return?

If the answers are "2006", and "yes", then if he cashed the check you're out of luck. If he returned it to the IRS with a note that it was supposed to be carried forward for estimated taxes, he might win. Seth

It must be based on the original return because you did not ammend until after the due date of the return. See Publication 505 page 48. ed