According to the National Association of Tax Preparers newsletter, the IRS is issuing refund checks to certain taxpayers …. by mistake! I wouldn’t cash that check you receive (without checking with me or another tax preparer) if the letter that came with it says, “We changed the amount of self-employment tax on Line 56 of your Form 1040 because there was an error on Schedule SE, Self-Employment Tax.”
The IRS seems to have been making an incorrect calculation in tax returns filed like these:
- Multiple Schedule C filed
- Schedule C and an S-Corp K-1
- S-Corp K-1 with health insurance premiums paid by the S-Corp
There may be other situations that are triggering this mistaken refund check even though the IRS says they have fixed the error. Keep an eye out and this time, do look a gift horse in the mouth!