A calculation error might have left many citizens who have received their stimulus check owing money to the IRS. According to the Tax Payer Advocate Service, around 9M notices have gone out from the IRS this year between January 1 and July 15.
The IRS letters were received by tax filers who had claimed for the recovery tax rebate on 2020 returns.
The IRS had at first allowed people who had not received the initial stimulus checks to claim the recovery tax credit against tax returns to receive those as tax refunds.
But the IRS has made a U-turn and is asking recipients of stimulus checks to recalculate and determine if they have to repay the authorities if they have received the 6470 letters.
Error Notices To Recipients Of Stimulus Check Significantly More Than In 2020
The Taxpayers Advocate Service has said in a statement that the IRS has been correcting errors on tax returns and giving out error notices to recipients of stimulus checks at a rate that is way above previous years.
It has gone up considerably from the 629,000 that were registered within the same time frame last year.
7.4M of the 9M were linked to stimulus checks. A spokesperson for the IRS said that adjustments had to be made to the whole process due to the COVID-19 pandemic and the rate at which they had to make payments.
Payments such as advance credits were given out immediately. This would normally have taken weeks and even months for processing before they went out.
The process of reconciliation of the stimulus checks has been the biggest issue that the IRS and tax planners have been facing. The balance due notice being sent by the IRS has no explanation-analysis or calculations.
Taxpayers who aren’t replying to the notice within 60 days might have to pay up. In an alarming development, citizens could also forfeit petition rights in the US Tax Court.
But most taxpayers say that getting through to a tax representative has been difficult. This disturbing development is coming within days of people receiving their third installment of the Child Tax Credit payments.