Quote Originally Posted by Michael Joseph View Post
Beard v commissioner Read it. That is the basis most likely of their claim. I think beard argued on exchange theory.

A few phone calls and perhaps a letter or two should clear up the matter.

I have been down this road. Read their arguments regarding zero returns. Most likely they are relying on those Supreme Court rulings. Before you say I did not file a zero return do yourself a favor and go read the foregoing.

Regards
MJ
Michael,

Thank you for responding so quickly.

I read 'Beard', and have before but it was a good refresher.

The 1040x did not zero-out all tax liability. I simply stated a LM negative offset in column B (Net Change) on Line 1 which is the 'Adjusted Gross Income' line. I was left with a tax liability but much less than the original. Perhaps you can clarify your comment "Before you say I did not file a zero return do yourself a favor and go read the foregoing."

The 1040x does not have a 'Line 21' to enter the LM negative offset, therefore I stated the offset on Line 1. Now there is a Line 7 'credits' and a Line 10 'other taxes' but they do not appear to apply to the LM deduction. I also did not think it prudent to place the offset in Line 2 (itemized deductions or standard deduction).

Frankly, when I decided to send an amended LM return I was hesitant to do so given my history we these criminals. So now I need the proper strategy and responses to avert this.