1040 X with refund applied to next year ES. Tax

[a-zbookkeeping]

Original return was filed and accepted by the IRS and the state of California on August 19, 2022, the return showed a refund of $10,000 we requested the refund to be applied to 2022 ES. Tax payment then we realized that the tax return must be amended for X reason  ( by the way Pro Series software does not support 1040 superseding return).
Q: can I amend the return Right away or I have to wait until the Original Return is Processed?

Q: I already prepared the 1040-X a head of time, the refund was decreased to 8,000.00, the 1040-X shows a balance due of $2,000 while we did not receive the original refund because it was Applied to 2022 ES. Tax Payment. And the only way to get red of that balance due is: to indicate on 1040-X  that the refund as shown on original return is 0.00.
any idea guys how to deal with this crap?

[sjrcpa]

Pay the $2,000.

[a-zbookkeeping]

The IRS Already have the $2,000 because when I amend the return, the applied amount to next estimated tax payment will be also changed from $10,000 to $8,000

[sjrcpa]

It doesn't work like that on an amended return. If they file the 1040x without paying, IRS may offset the $10,000 applied to 2022 from the original return.

[a-zbookkeeping]

I understand your point but the amended return will change all the original entries including the applied refund to next year estimated tax payment. In another word they will apply 8,000 only to next year estimated tax payment because the new 1040 it says so. The other problem that my client doesn’t want to pay more than refund available as estimated tax payment. 

[rbynaker]

Unfortunately there's a disconnect between how things should work and how things actually work.  I'd strongly recommend the client just pay the $2K and get the money back when filing the 2022 return.  The overpayment applied is purely a timing difference.  Pay that money now, get it back later.  The fees I'd charge to argue with the IRS about where the money should have been applied are a permanent difference.  Pay me now for my time, I'm not giving it back later.  "I'm happy to go either direction, Client let me know how you want to proceed." 🙂

That said, you should be in the time window when the credit elect can be reversed.  See IRM 21.4.1.5.6.1(3):

https://www.irs.gov/irm/part21/irm_21-004-001r#idm140355427501440

We're still in the window for this to count as a superseding return.  But IMO you're swimming upstream for a measly $2K.  I wouldn't expect the IRS computers to handle this properly but if you could find a human to open the mail or answer the phone it should be fairly easy.  But then that's not the world we live in at present.  YMMV.

Rick

[a-zbookkeeping]

Hi Rick:

I got it, no way arround it but to pay the $2,000

Now, the question is: can the $2,000 be added to the total payment paid for 2021?

In this case the refund on the new 1040 will become again $10,000 instead of $8,000 which will be applied any way to 2022 estimated tax payment. (IN THIS CASE THE APPLIED AMOUNT WILL REMAIN THE SAME ON BOTH RETURNS)