Federal Adjustments Letter

  1. Why did I get this letter?
  2. I am no longer married to the spouse on this letter. Is this letter sent to my former spouse?
  3. How do I know if I need to make changes to my Wisconsin return?
  4. What happens if I don't amend my return?
  5. What if I already filed an amended Wisconsin return for these changes and paid the tax due?
  6. What happens if the IRS changed their adjustments?
  7. What should I do if the IRS canceled its original notice of tax due?
  8. What if the IRS adjustments don't affect my Wisconsin tax?
  9. What should I do if I need more time to file an amended return?
  10. What form should I use?
  11. Can I file my amended return electronically?
  12. Where do I find forms and instructions if I need to file my amended return on paper?
  13. I have Wisconsin withholding on this income. What should I do?
  14. Why should I be charged interest?
  15. What should I do if I can't pay the full amount due?
  16. How do I avoid problems like this in the future?

  1. Why did I get this letter?

    You received this letter because the Internal Revenue Service (IRS – the federal tax agency) changed your federal income tax return. The Wisconsin Department of Revenue (DOR – the state tax agency) doesn't have record that you filed an amended return with us reporting similar changes to your Wisconsin income tax return. You must file an amended return with DOR for the year stated in this letter.

    For more information about the IRS changes, contact us at (608) 266-2486.

  2. I am no longer married to the spouse on this letter. Is this letter sent to my former spouse?

    We send this letter to both you and your former spouse if you filed married filing joint for the year of the IRS changes. This is true even if you currently do not file a joint return with that spouse. Since you and your former spouse filed a joint return for the tax year stated in this letter, you both must correct your state return and file an amended return.

  3. How do I know if I need to make changes to my Wisconsin return?

    If the changes to your federal return also affect your state taxes, the IRS notice instructs you to file a state amended return. In most cases, the changes made by the IRS will affect your Wisconsin taxes, making it necessary to file an amended Wisconsin return.

  4. What happens if I don't amend my return?
    • If you don't amend your Wisconsin return and you owe additional Wisconsin income taxes, we will send you a bill with the amount you owe plus 12% interest on the additional tax due from the original due date of the return until the balance owed is overdue.
    • The bill may also include a 25% negligence penalty for filing an incomplete or incorrect return.
      • Amending your Wisconsin return will minimize the interest due and likely save you the 25% penalty.
    • The IRS information may not give us all the information we need to accurately calculate your Wisconsin tax due.
      • We issue the bill based on the information we have and it could result in a higher Wisconsin tax.
      • If changes are required after we issue the bill, you need to appeal.
  5. What if I already filed an amended Wisconsin return for these changes and paid the tax due?

    We sent this letter because we did not receive your amended return or payment for the state tax due. You may have paid the federal tax bill, but not the additional state tax.

    If you believe our records are incorrect and you already filed your amended Wisconsin return, send us:

    • A copy of the amended return you previously filed
    • Write the date you filed it at the top of the return copy
    • If you paid the balance due, attach a copy of your canceled check, front and back, or proof of electronic payment
    • A copy of the letter you received
    • Mail documents to:
      Wisconsin Department of Revenue
      Federal-State Adjustment Unit
      Mail Stop 5-144
      PO Box 8906
      Madison, WI 53708-8906
  6. What happens if the IRS changed their adjustments?
    • File an amended return with us for the final IRS adjustments
    • Include a copy of the IRS final notice with your amended return
    • Place the amended return on top and mail them to the address on the return (below the signature line)
  7. What should I do if the IRS canceled its original notice of tax due?

    Send us a copy of the IRS letter of cancellation, along with the letter you received to:

    Wisconsin Department of Revenue
    Federal-State Adjustment Unit
    Mail Stop 5-144
    PO Box 8906
    Madison, WI 53708-8906
  8. What if the IRS adjustments don't affect my Wisconsin tax?
    • Send a letter (to the address listed in question #7) or email (FedStateAdjust@revenue.wi.gov) explaining why you don't need to change your Wisconsin return.
    • If you are mailing a letter, attach the letter you received with your reply.
    • Do not include social security numbers in emails. Instead, use the Letter ID shown on the upper right of our letter.
  9. What should I do if I need more time to file an amended return?

    Call us at (608) 266-2486 and we will consider your extension request.

  10. What form should I use?
    • If you were a full-year Wisconsin resident for the year you are amending:
      • Use Form 1X
      • Enter code 11 (federal audit and adjustments) as the Explanation of Changes code on the last page of the return
    • If you were a part-year resident or nonresident for the year you are amending:
      • Use Form 1NPR
      • Check the amended box in the top left section of page 1
  11. Can I file my amended return electronically?
    • Yes. Go to revenue.wi.gov, select the Individuals tab and click Wisconsin e-file, our free e-filing application.
      • Form 1X is available for tax years 2009 and later.
      • Form 1NPR is available for tax years 2010 and later.
    • You may also check with your software provider to see if their forms allow you to file amended returns for the applicable years.
  12. Where do I find forms and instructions if I need to file my amended return on paper?
    • Forms and instructions are available on our website, revenue.wi.gov.
      • Use the Forms link on the home page
      • Click the tax year you are amending
      • Select Individual and choose Form 1X or 1NPR
    • You can order forms by calling (608) 266-1961.
    • Put the Wisconsin amended return (Form 1X or 1NPR) on top and mail to the address shown on the form (below the signature line).
    • We cannot accept faxed or emailed returns.
    • Do not send a copy of the letter you received with your amended returns.
  13. I have Wisconsin withholding on this income. What should I do?
    • Report your total Wisconsin withholding (the amount you originally reported plus the additional amount) on your amended return.
    • Along with your amended return, attach copies of the information statements showing the Wisconsin withholding amounts.
      • Examples of information statements include:
        • Form W-2 (wages)
        • Form 1099-R (pensions, annuities, IRAs)
        • Form W-2G (gambling income)
  14. Why should I be charged interest?

    By state law we are required to charge interest.

    • We charge 12% interest per year on the additional tax due from the original due date of the return until the balance owed is overdue. (Sec. 71.82(1)(a), Wis. Stats.) This cannot be appealed.
    • We charge 18% interest per year and additional fees on any overdue balance. (Sec. 71.82(2), Wis. Stats.)
  15. What should I do if I can't pay the full amount due?

    If you can't pay the full amount due, you must still amend your return and pay as much as you can with your amended return. We will bill you for any remaining amount due and you may request a payment plan

  16. How do I avoid problems like this in the future?

    It's always in your best interest to keep good records of the income/deductions you receive throughout the year.

    • Review your tax returns and information statements (ex. Form W-2, Form 1099-R, Form 1099-INT, Form 1098s, etc.) to be sure you reported all income/deductions/credits correctly.
    • Follow the instructions on how to report income and take the applicable deductions/credits.
    • If you find an error on another return, file an amended return to correct the error(s) as soon as possible.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Federal-State Adjustment Unit
Mail Stop 5-144
PO Box 8906
Madison, WI 53708-8906
Phone: (608) 266-2486
Email: FedStateAdjust@revenue.wi.gov

November 19, 2013