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No. of Recommendations: 2
For the first two items, I would have recommended writing a letter to the IRS and explaining their errors in reading your return. And I would send copies of the applicable schedules/forms as support.

However, you have a third item - the mis-reported SEP contribution. And I'm torn on that one. That one is your error, not theirs. Normally when the original return is wrong I suggest an amended return. But if you walk through an amended return, the correction won't really show up as everything affecting AGI is compressed into one line.

From my experience, it seems like the folks at the IRS who process amended returns are sharper than those who read and process responses to these notices of proposed changes. And it will take an employee who can understand the larger picture of your return to see that your error makes no difference. So that's an argument in favor of the amended return.

You could write to them, explaining the SEP error pretty much as you did here. Or you could prepare an amended return that has no changes, just an explanation. I'd probably break the conventional rules and actually attach a corrected 1040 to the amended return to show your changes, as that is the only place the SEP correction would be reported.

Either one should work. But I'd have to favor the amended return by a very slim margin.

--Peter
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