First, it is NOT a "penalty".  It is a repayment of a credit that the taxpayer does not qualify for.

Have you gone through the error check, such as entering the year-end amount of the IRAs..

Have you double checked that there is no "compensation".  Look at Line 1 of form 1040, Line 2 and 3 of Schedule 1 any Partnership K-1 profits or non-taxable combat pay.

Have you checked that the IRA deduction is showing up on Line 19 of Schedule 1?