Question about 1040X (amendend form) and refund?

Question

We filed our taxes for 2006 but there was a mistake and the IRS informed us that we owed them money (it was over $2,000). But we knew they made a mistake and we went to our local IRS office and they completed the 1040X for us. When everything was complete we no longer owed the IRS but we were owed $1200. But this was a long process therefore we still had a balance when we filed for 2007. So they took our refund for 2007 and applied it towards our supposed balance of $2000 (which is much higher now because of interest). We sent in the 1040X and its complete and we not longer have a balance but no one is able to tell me if we will get money back. I have called but not one is able to tell me. So my question is does the NEW amended form cancel out our old form and our old balance? Will we ever see a dime?

Answer 1

Yes, you should get the $1200 you were owed for 2006, plus whatever was taken from 2007.  It will take around 12-16 weeks after the 1040x was filed.

Answer 2

The 1040X, if accurate, will reverse any additional tax assessments including any associated interest and penalties. If you were due an additional refund, you will receive that along with interest. You will also receive any refund offset from your 2007 tax return.

When you say that your amended return is compete, does this mean the IRS has finished processing it? If so, then whatever is due you will be refunded within 2-4 weeks of the time the 1040X was processed.