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How do you calculate interest on an amended return?

bgsumrell
Level 1
 
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6 Comments 6
BobKamman
Level 15

I give the clients an estimate of how much it will be and tell them to wait for a bill.  IRS doesn't charge interest on interest, so they might as well know the exact amount.  

George4Tacks
Level 15

I don't. Like Bob says, give them a guess but let IRS send a bill. 

Here is an estimator https://www.irscalculators.com/interest-calculator

 


Answers are easy. Questions are hard!
IRonMaN
Level 15

I don't even go that far.  I just tell them that they might get a bill for some interest down the road.  Nobody has ever came back and complained to me about not giving them an estimate.


Slava Ukraini!
BobKamman
Level 15

But I have had clients call me to say IRS billed them for $100 when my estimate was $40.  And it turned out I was right.  Of course, this results in work that builds goodwill but produces little revenue.  

IRonMaN
Level 15

Did I forget to mention that I do very few amended returns so they don't tend to be revenue or goodwill producers.


Slava Ukraini!
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BobKamman
Level 15

The last amended return I did was for a client who received a corrected statement for unemployment compensation.  It was for about $2,000 and they were in a 24% tax bracket, so the amount owed was about $480.  (No credits or other complications.)  They paid the $480 and just received a bill from IRS for another $450.  No explanation of the change.  I think IRS is catching up with the backlog with a new computer program that uses Artificial Stupidity.