The IRS incorrectly changed my return. Is it too late to do anything about it?

Question

My wife and I purchased a home last year and claimed the first-time homebuyer credit. After filing, we received a notice that our return had been changed, and our refund had been adjusted down exactly $1,500. This looks to me for all the world like they decided to give us the Long-Time Resident $6,500 credit instead (absolutely not applicable), and the three people at the IRS that I spoke to concurred: it made no sense, and they never should have changed anything.

So (and I want to emphasize this part) because I'm a moron, I sat on this for about seven months. When I look at the original notice now, I see a paragraph that states the following:

You need to contact us within 60 days from the date of this letter to request an examination of your return and to retain your rights to appeal our decision. We will consider any information you send us, regardless of the 60-day period, but you can only request an examination and keep your right to appeal our decision within that period.

My initial phone call to them was definitely within the 60 days, but I have not formally requested anything yet.

So my question is: how should I proceed from here, am I too late, and what does it mean that they will "consider" information regardless of the 60-day period?

Answer 1

I've said this in a number of circumstances, but call up the IRS and talk to them. I've found them to be courteous, knowledgeable, and helpful.

The first year I submitted a Form 1065 I missed the extension deadline, and would have owed a couple hundred dollars. They instructed me on how to basically ask forgiveness when I filed my tax return. I was never assessed the penalties.

I'd call up the IRS and talk to them, especially before it gets too busy.

Answer 2

I got my return messed up by IRS couple of years ago. As I discovered, the best way for handling it was to summon your patience and call them, if it's not fixed, call again, etc. I talked to half-dozen people there, and finally reached the Taxpayer Advocate service which finally was able to sort it out (nobody still knows how they managed to turn 2000 return into 7000 liability, but they were able to set things straight). It took a lot of time and nerves, but it worked out at the end. So I would advise to call IRS and if it doesn't work out try TAS too. Worst case, you are still in the same position as now after that, but chances are somebody there will be able to fix it or at least point you in the right direction.