Form 843 or 1040X (I should not have been charged an "Estimated Tax Penalty")?

Question

I paid an "Estimated Tax Penalty" last year, when I should not have done so. Do I need to file form 843 or 1040X ?

Thanks.

Answer 1

*sigh* the time to proofread your tax return was before you filed it.

Send the IRS form 2210.

Let me rephrase this.

YOUR tax return showed an entry for the estimated tax penalty.  

This was because you used software.  If this was the first year you've used the software on this computer, the software package didn't have your prior year tax return data.  If your tax bill in 2006 was $0, then yes, you would have passed a safe harbor and would not have owed any estimated tax penalty.

The software package apparently didn't quiz you about your prior return, saw that you flunked 2 of the safe harbor tests (owed more than $1000 in tax and paid in less than 90% of this year's tax bill) and calculated a penalty.  Since you failed to proofread your tax return, you "voluntarily assessed" yourself the penalty.

According to IRS rules whatever is on the original return is what the IRS *must* go by.  The IRS policy is that you can only ask for the penalty to be waived by submitting a form 2210 and proving that you didn't owe it.

Answer 2

If you have a bill, prepare Form 2210 showing penalty due of zero and send it back to IRS with a copy of the bill.

Answer 3

File Form 1040X with a correct Form 2210 attached.  The 1040X will show a refund of the penalty you paid.