- quote -

The Underpayment of Estimated Tax (ES) penalty is based on
the tax liability reported on the original return. The tax
liability may be amended up or down but the ES penalty does
not change.

IRS Revenue Ruling 83-36

"Penalties; underpayment of estimated tax; individual;
amended return. To be considered the return for the year for
purposes of computing the penalty for underpayment of
estimated tax under section 6654(b) of the Code, an amended
return must be filed by the due date of the original
return."

=============

The only circumstance in which an amended return changes an
ES penalty is amending a return to the married filing joint
(MFJ) filing status.

IRS Revenue Ruling 80-355

"The addition to the tax for underpayment of estimated tax
is based on the tax shown on the joint return of the
taxpayers filed after the due date prescribed by law for the
filing of the return when the joint return replaces the
previously filed separate returns of the taxpayers."

Frederick Lorca

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"toller" <toller[at]yahoo.com> wrote:

- quote -

If you don't have software to assist you in accurately
calculating the new amount of penalty, IRS should not be
"riled" because you didn't calculate it. File your 1040X
assuming no penalty, and let the IRS computer calculate the
new penalty amount before they send you your refund.

ak

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I am amending my 2001 tax return.
On it, I had to pay a $340 penalty for inadequate
withholding. On the amended return I will owe about $500
less, but will probably still owe a penalty.

Do I recalculate the penalty and include that in the amended
tax; or do I subtract the penalty from the original figure
and the amended figure, and just lose out on the reduced
penalty?

I am not looking to grub every last dollar; I just want to
do it in a manner that will not rile the IRS. Thanks.

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