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Wednesday, February 1, 2023

Stimulus Check Update: Check If You Owe Money To The IRS

The investigation of a math error on a stimulus check is underway by the IRS and has left millions of Americans owing money to the government.

The Taxpayer Advocate Service confirmed that the Internal Revenue Service had sent 9 million notices to the people from the 1st of January to the 15th of July. These letters were sent out to the people who claimed the recovery rebate credit on their 2020 tax returns.

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In the beginning, it allowed those who did not get their first or second stimulus check to claim it on their returns and receive them as a part of a tax refund. Everything has changed now after a U-turn and people are being asked to check if they owe money through a 6470 letter being posted to them.

Stimulus Check: The IRS Is Correcting Its Errors Now

The TPAS stated that the IRS is correcting more errors on its returns and issuing more math error notices than in the last years.

It has increased from the registered 629k people in 2020 and of these 9 million notices, 7.4 million were related to a stimulus check.

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An IRS spokesperson stated that the pandemic and the fast movement of these payments led to this whole process being adjusted. The tax credits were paid out immediately which usually takes weeks or even months of processing before being sent out.

The worst thing that people can do right now, after they get a letter from the IRS is do nothing, especially if they fail to give vital information to the payees.

Dan Herron stated that the biggest issue that they are facing is the reconciliation of stimulus check. He is a Certified Financial Planner and CPA with Elemental Wealth Advisors.

The Internal Revenue Service is sending out, balance notices without any calculations or explanation analysis.

Furthermore, for those that do not respond within 60 days of receiving the notice, the adjustment is final and the IRS can start collections. Additionally, Americans can lose the right to file a petition in the U.S. Tax Court.

In total, it is reported that 5million taxpayers were sent a math error notice this year without the 60-day message being included.

As a result, the IRS resent some letters with clear language and is restating the time you have to respond as a result of the error.

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