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IRS sends a letter to some asking for stimulus money back

IRS sends a letter to some asking for stimulus money back
Millions of “math error” notices cause confusion for taxpayers

The Internal Revenue Service (IRS) has sent out millions of “math error” notices this year, the majority of which were related to stimulus payments amid the coronavirus pandemic.

Ifølge Taxpayer Advocate Service, the IRS sent roughly 9 million alerts between 1 januar 1 og 15 July this year, compared to the 628,99 sent in the same period last year. Om 7.4 million were related to stimulus payments.

The notices have caused confusion for many taxpayers, who have been left unclear about what is owed.

Many Americans were offered financial aid by way of the $1,400 checks that were sent out directly, as part of the American Rescue Plan. Those with an individual income of under $75,000 or a joint income of $150,000 if married, were eligible for the payments. Other funds were also made available, including the Child Tax Credit, which was expanded by at least $1,000.

Those who didn’t receive the $1,400 stimulus check could claim it on their taxes, as a Recovery Rebate Credit, but the IRS said some people who claimed this credit should not have, and corrected millions of returns.

The IRS notified people by letter if their tax return was being changed, but there were reportedly errors with some of the letters, some of which were sent out without important figures and others without information about the right to appeal. The agency followed up with additional letters, explaining that it was possible to appeal the changes.

“One of the biggest issues we’re having is the reconciliation of stimulus payments,” Dan Herron, a San Luis Obispo, California-based CFP and CPA with Elemental Wealth Advisors told CSNBC.

Multiple payment options and limited tracking has led to high numbers of discrepancies between the IRS and taxpayers, han sa.

“The IRS is sending out balance due notices with no calculation or explanation analysis,” said Mr Herron.

The IRS received more than 167 million phone calls during the 2021 filing season, men bare 7 per cent of taxpayers were able to reach an agent to help resolve their issues, the Taxpayer Advocate Service reported.

Den uavhengige has contacted the IRS for comment.