I made a similar mistake on my 1120S last year and just want to add - don't forget about your state filings! If your state requires an S-Corp return, you'll likely need to amend those too. In my case, I had to file amended returns with both the IRS and my state tax department. Also, double-check your basis calculations after making these corrections. The shift from salary to distributions affects your basis differently, and having an accurate basis calculation is crucial if you ever need to take losses in the future.

Just went through a similar S-Corp amendment nightmare myself! A few additional thoughts based on my experience: When you file the amended 1120S, make sure to check the "Amended Return" box at the top and attach Form 1120X if your software generates one (some do, some don't). The explanation statement should be concise but clear - I used something like "Correcting officer compensation from $41,000 to actual amount paid of $36,000" for each line item. One thing that really helped me was keeping a detailed log of all the corrections I made and why. This came in handy when I got a letter from the IRS asking for clarification a few months later. Having everything documented made responding much easier. Also, since you're correcting both salary down and distributions up significantly, be prepared to explain the business reasons if asked. The IRS sometimes questions when they see compensation decreases paired with distribution increases, even in amendment situations. The good news is that being proactive about corrections usually works in your favor with the IRS. They appreciate taxpayers who catch and fix their own mistakes rather than waiting for an audit to discover them.

Just a word of caution - DO NOT just keep cashing the refund checks without resolving this. The IRS operates under a "pay now, fight later" system. They might be sending you refunds now, but if they determine later that those payments were legitimately meant for your tax account, they can come back and assess underpayment penalties and interest for the taxes you should have paid. I knew someone who had a similar situation (though it was just for one year, not ongoing). They spent the refund, and two years later the IRS figured out the error and wanted not just the original amount back, but also nearly 25% more in penalties and interest.

This is such a bizarre situation! Reading through all the responses, it sounds like several people have had success getting to the bottom of similar mysteries. The fact that these payments have been so consistent for 5 years really does suggest it's not just a random error. I'd recommend trying multiple approaches simultaneously: 1) Use one of the callback services mentioned to get through to the IRS research department, 2) Have direct conversations with anyone who might have your SSN (family, former employers, accountants you've used), and 3) Consider requesting a meeting with the Taxpayer Advocate Service if the regular channels don't work. The specific dollar amounts you mentioned ($1,876.42 type numbers) really do sound like they're calculated based on something - maybe estimated taxes for a business entity, investment income, or contract work that's being reported under your SSN. Whatever you do, don't just ignore this or assume it will work out in your favor. As others have pointed out, the IRS can come back years later demanding repayment with penalties and interest if they determine these were legitimate tax obligations. Better to spend some time now getting it resolved than potentially facing a much bigger headache down the road.

Maybe i'm missing something here but couldn't a candidate just say the legal issues WERE related to the campaign somehow? seems like there's a ton of gray area that would be easy to exploit. like who decides if legal fees are "personal" vs "campaign-related"??

This is such a timely question given all the news coverage lately. What really complicates this is that the determination often comes down to timing and intent, which can be hard to prove either way. I've seen cases where candidates argued that legal fees were campaign-related because the allegations "affected their ability to campaign effectively" or because they stemmed from their "public profile as a candidate." The FEC and IRS have to evaluate each situation individually. One thing that's often overlooked is the reporting requirements. Even if there's debate about whether the expense was legitimate, failing to properly report potential personal use as income can create additional problems. It's often the cover-up that gets people in more trouble than the original questionable expense. For anyone dealing with this situation, documentation is key. Keep detailed records of what the legal issues relate to and when they originated relative to your political activities.

Just curious - did your payment method specify whose SSN the payment was for? When my husband and I pay, we make sure to include a note on electronic payments that specifies "1040 payment for [primary SSN]." Might help others avoid this situation in the future.

I went through this exact same nightmare last year! The frustrating thing is that when you file jointly, the IRS systems should automatically know to apply payments to the primary taxpayer's SSN, but their payment processing system doesn't always communicate properly with their return processing system. One thing that really helped me was getting a transcript of my account activity from the IRS website (you can get it instantly online if you have an account). This shows exactly when and how your payment was applied, and you can use it as evidence when you talk to an agent. It's under "Get Transcript" and you want the "Account Transcript" for the tax year in question. Also, when you do get through to someone, ask them to put notes in your file about the payment misapplication. That way if you have to call back, the next agent can see what's happening without you having to re-explain everything from scratch. The IRS agents can see payments across different SSNs in their system, so they should be able to fix this pretty quickly once you get the right person on the phone. Don't give up - this is definitely fixable, just requires persistence with their terrible phone system!

I'm currently at day 38 since filing my amended return and still waiting for any notice. Reading through everyone's experiences here is both reassuring and nerve-wracking - it seems like 30-50 days is pretty typical, but the uncertainty is killing me! I've been checking my mailbox obsessively and even signed up for USPS Informed Delivery, though I see some folks mentioned notices don't always show up there. Has anyone had success checking their IRS transcript online to see if there are any codes indicating a review has started? I'm wondering if that might give me a heads up before the physical notice arrives. Also, for those who eventually got through to the IRS by phone - did you call right at 7 AM when they open, or is there a better time to avoid the longest wait times?

I'm at day 41 since filing my amended return and still no notice here either! This thread has been incredibly helpful - it's reassuring to know I'm not alone in this waiting game. Based on everyone's experiences, it seems like 30-50 days is the current norm, which means I should hopefully see something soon. I've been religiously checking my online transcript every few days and finally saw a transaction code 971 show up last week, which I believe indicates they've sent a notice. Now I'm just waiting for it to actually arrive in my mailbox. For what it's worth, I called the amended return hotline at 866-464-2050 (thanks @Hazel Garcia for that tip!) and while I still waited 2.5 hours, I did get through and the agent confirmed my return was received and is in the review queue. They couldn't give me an exact timeline but said notices are currently taking 6-8 weeks to be mailed out. Hang in there everyone - sounds like we're all in the same boat!