Don't Mess With Taxes

If the IRS letter about your third COVID economic impact payment or advance Child Tax Credit has the wrong amount, the agency says to file anyway, using your "best information." (Photo by Andrea Piacquadio from Pexels)

Did the letter you got from the Internal Revenue Service about last year's economic impact payment (EIP) or advance Child Tax Credit money have your amount(s) wrong?

The Internal Revenue Service says don't let that dissuade you from filing your 2021 tax return.

In fact, IRS Commissioner Chuck Rettig, during a conference call with reporters to discuss today's start of the annual tax filing season, urged all taxpayers to file using the most accurate information they have, submit returns electronically, and have their refunds directly deposited.

Incorrect IRS informational notices: There have been anecdotal reports from the tax community, like the one below posted on Twitter, of taxpayer problems with the IRS' record of the payment amounts it distributed last year.

IRS reviewing wrong amount reports: Ken Corbin, Wage and Investment Division Commissioner and the IRS' first Chief Taxpayer Experience Officer, joined Rettig on the call. Corbin acknowledged that the agency has received reports of incorrect information, particularly on Letter 6419, which was issued in connection with advance Child Tax Credit payments.

The IRS is looking into the situation, Corbin said, but doesn't believe the problem is widespread. "We believe it's a limited group," he said, adding that in some cases the differences could be attributed to changes in taxpayers' residences or banks.

"We want to be as transparent as possible," said Rettig. "We don't have all the information. When we do, we will release it."

File using correct info: In the meantime, what should taxpayers who get the mailings noting they got a certain amount, do if they didn't receive the money?

"If you get a letter and you know you didn't get a third economic impact payment, follow the instructions and file an accurate return," Corbin said. If they have deposits or other documentation that's different from the IRS letter, which is Letter 6475 for the third COVID stimulus amount, they should use that, and claim the Recovery Rebate Credit on their 2021 tax return.

"It's important for taxpayers to file an accurate return based on what they know," added Rettig. He noted that this current letter discrepancy issue is analogous to last year's problems faced by filers who encountered unemployment benefits fraud in connection with their returns.

Taxpayers with questions about the amounts in the Child Tax Credit or EIP letters also can check or open an online taxpayer account to review the amounts of payments shown there.

2021, 2020 overlap: Another issue that could pose problems, or at least concerns, for taxpayers is the continuing IRS delay in processing 2020 tax returns.

"It's all hands on deck," Rettig said of the backlog the IRS has been facing since pandemic protocols forced closing of the agency's campuses. "We realize the importance of refunds to taxpayers, and refunds are given priority in this approach. We understand our mission is to give these refunds out as quickly as possible. Every person at the IRS is highly focused on this. We understand that highly focused doesn't direct deposit somebody's refund, but it among our most important priorities. We're doing everything imaginable to work through the backlog as quickly as possible."

But that logjam should not affect this year's taxpayers who are still waiting on the IRS to finish up with their return from last year. "We know it's frustrating," said Corbin, adding that the agency will work simultaneously on both tax years' returns.

In these cases, both Rettig and Corbin urged affected taxpayers to file their 2021 taxes. And when they e-file, as recommended by the IRS, when asked to authenticate their filing by entering their adjusted gross income (AGI) from their most recent tax return, enter $0. Yes, zero, as the AGI on your still unprocessed 2020 return.

The IRS.gov page on validating your electronically filed tax return has more for filers in this situation.

And yes, said Corbin, some taxpayers might get their 2021 refunds before their money due from 2020 is issued.

"It doesn't mean there's a problem [with your 2020 filing]," Corbin said. "It's just the process."

You also might find these items of interest:

• Top 10 Taxpayer Problems of 2021 likely to repeat in 2022
• Open a bank account for tax refund direct deposit before next filing season
• Keep an eye out for IRS letters on COVID relief money, advance Child Tax Credit payments 

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