Hey, guys, it's Ginny Silver.
And today I want to talk to you about something that the
IRS is doing.
The IRS is taking back people's stimulus checks.
Many taxpayers are reporting that they have received a notice
from the IRS, letting them know that due to a math error,
they are now are required to pay back their stimulus check
and talk to you about who this affects, what the notices
look like, what they say, and what they are missing that
should have been in there as well as what taxpayer rights
are. Can the IRS actually take these back?
Is there anything you can do to fight it?
And who can you ask for help?
Now, roughly 11 million math error notifications to taxpayers
have been issued by the IRS.
These are issued when the IRS discovers a miscalculation,
corrects the error and you now owe more taxes than you previously
paid. Now.
Recently, many taxpayers claimed the recovery rebate credit
on 2020 income taxes because they qualified based on their
tax return.
While the IRS is now mailing out notices that adjustments
due to math errors now make those individuals ineligible.
Millions of taxpayers who claimed this credit on their income
taxes may not actually qualify to receive the recovery rebate
credit, otherwise known as the stimulus check.
To these math errors, taxpayers are required to pay back
the stimulus check.
Now, those who received the letters may not actually qualify
for the credit due to either being outside of the income
requirements, which are now changed due to a math error or
the error could be due to an incorrect Social Security number
or a dependent not being listed correctly on their tax return.
People were sent either a CP eleven CP twelve or CP 13 notice
stating that there was a miscalculation or overpayment and
their refund amount had changed.
But there's another problem here.
The IRS failed to include important vital information on
taxpayers appeal rights.
In 5 million of the notices that were issued, taxpayers have
a right to appeal the decision if they feel that they are
in fact qualified and do have documentation to prove that
they are qualified to receive the tax credit.
These appeal rights did not appear in the notices for 5 million
taxpayers that received this notice.
The Taxpayer Advocate Service is an independent organization
that works within the IRS.
Their purpose is to ensure that taxpayers are treated fairly
and that they know and understand their rights.
Recently, the Taxpayer Advocate Service issued publications
regarding these math error notices.
So first, can the IRS actually do this?
Can they actually make people pay back their stimulus checks?
The answer here is yes.
Congress provided the IRS with math error authority to correct
returns where the recovery rebate credit was incorrectly
claimed. So how about the fact that the IRS failed to state
the language regarding the 60 day appeal requirement?
Taxpayers do not know that they are number one able to appeal
the decision if they can prove otherwise, and number two
have a 60 day deadline in which to do so.
The Taxpayer Advocate Service States that although the statute
requires the taxpayer to request Abatement within 60 days
from the date that the notice was sent, it appears it does
not require the notice itself to include the 60 day time
period language.
Thus, based on the wording of the statute, the omission of
the 60 day abatement time period from the notice does not
appear to invalidate the notice or the math error assessment.
So for those of you who have received one of these notices,
what's next?
What happens now?
Taxpayer Advocate Service States that after receiving the
notice, taxpayers can either accept the changes the IRS made
and pay the amount due except a reduction of a credit or
request Abatement within 60 days of the notice being sent.
If a taxpayer request an Abatement within the 60 day time
period, they can submit documentation showing why the adjustment
in question is in fact incorrect, or the taxpayer can request
Abatement without providing supporting documentation.
Either way, the math error assessment must be abated.
If the taxpayer provides supporting documentation and the
IRS agrees, the Abatement will be input and a notice will
be sent informing the taxpayer that the matter has been closed
or if the taxpayer did not provide supporting documentation.
When requesting this, then the IRS, after consideration,
may reassess the tax by following deficiency procedures,
which means sending the taxpayer a notice of deficiency.
If a taxpayer fails to request the Abatement within the 60
day time period, the math error assessment will not be updated,
the assessment will be final and the IRS can move towards
collection. Taxpayers need to understand that without a timely
abatement, they lose their opportunity to receive a statutory
notice of deficiency.
If you fail to request Abatement within the 60 day time period,
then the IRS will move forward and go into collections on
the debt without requesting an appeal.
Within the 60 day time period, you lose all possibility of
receiving an Abatement.
The 60 day time period has elapsed and the taxpayer has not
requested Abatement.
The math era assessment is final and cannot be reviewed by
the US Tax Court.
This is significant because the tax court is the only judicial
form in which a taxpayer does not have to pay the tax liability
before petitioning the court.
However, one option for the taxpayer would be to pay the
tax, file a refund suit in the US District Court or the Court
of Federal claims.
But this does mean that taxpayers would need to have the
funds on hand, pay the liability and then dispute the assessment.
Now, if you need assistance with your taxes directly, I recommend
that you contact the Taxpayer Advocate Service.
Their information can be found in the video description down
below. Okay, you guys, I hope that was helpful.
Please click like subscribe and leave me a comment down below.
Taxpayers are reporting that they are receiving notices from
the IRS, letting them know that due to a mass error, they
did not qualify to receive a stimulus check.
There's too many clouds moving.
As soon as I adjust my lights, the clouds are going to move
back. She's calling me.
Not a phone person.