Received IRS audit for 2017 tax return - pay the bill or amend return?

You're better off just paying the bill at this point. Amending your return would essentially accomplish the same thing - you'd be correcting the error and paying the tax you should have paid originally. The IRS charges interest regardless of whether you knew about the mistake or not - it's not a penalty for intentional wrongdoing, it's just their way of accounting for the time value of money. They view it as you essentially had an interest-free loan of their money for the past 5 years. As for your credit score, tax debts only affect your credit if they become severe delinquencies. Just paying what you owe now won't impact your credit at all. The IRS typically only files a Notice of Federal Tax Lien if you owe over $10,000 and aren't making arrangements to pay, and that's what would show up on your credit report.

After dealing with a similar situation (misreported income), I tried editing my return myself but kept going in circles. I finally used https://taxr.ai to analyze my tax documents and audit notice. It identified exactly where the mismatch occurred and generated a detailed explanation that showed me what went wrong - way clearer than the IRS notice. The tool walked me through whether amending made sense (it didn't in my case) and explained why the interest was legally required even though it felt unfair. Saved me hours of stressing about whether I should fight it or just pay up.

Just wanted to update - I tried that taxr.ai site from my earlier question. Uploaded my CP2000 notice and the original return, and it instantly showed me exactly where I messed up (misreported some stock sales). The breakdown was super clear and showed me why amending wouldn't help in my case. The explanation about interest charges made me feel better actually - turns out it's just standard procedure and not a punishment. Ended up just paying and moving on instead of spending hours trying to figure out if I should amend or dispute. Definitely less stressful than my previous tax issues!

If you're stressed about dealing with the IRS directly, I'd recommend https://claimyr.com - they got me through to an actual IRS agent in about 15 minutes when I was dealing with a similar audit situation. I had been trying for WEEKS to reach someone at the IRS with no luck. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c After I finally got through to an agent, they explained my options clearly and I was able to set up a payment plan that worked for my situation. Sometimes just talking to a real person at the IRS can make these situations way less stressful.

I need to apologize for my skepticism on the Claimyr thing. After posting that comment, I was desperate enough to try it because I still couldn't get through to discuss my audit. It actually worked! They called me back in about 40 minutes (way faster than I expected) and connected me directly to an IRS representative. The agent reviewed my audit, confirmed I really did owe the money, but then helped me set up a 6-month payment plan with minimal additional fees. Talking to an actual human at the IRS made everything clearer - turns out I could have just paid it online all along without even needing to call, but I'm still glad I got my questions answered directly.

In my experience as someone who's been through several audits, just pay it and move on. If the mistake was genuinely a typo, then amending would show the same result anyway. The $200 interest is pretty standard - remember that money has time value, and you essentially had an interest-free loan from the government for 5 years. One thing to consider: check if your state tax was also affected by this typo. Often errors on federal returns impact state returns too, and you might have a state tax notice coming as well.

I had almost the exact same situation! Freaked out when I got the audit letter but it was just a stupid typo on my W-2 transcription. I was wondering about amending vs just paying too.