IRS Sends Out 11 Million “Math Error” Notices
Many Americans are receiving Math Error notices from the IRS resulting in adjusted tax due or reduced refunds for 2020. This is more than five times as many as they sent in 2019 and more than 14 times as many as last year. The majority of the letters (more than 80%) involve taxpayer claims for Recovery Rebate Credits, the term for stimulus payments claimed on tax returns.
This significant increase in tax liability adjustments and Math Error notices seem, for the most part, to be triggered by errors in calculations of the Stimulus Payments. There are a number of possible reasons, from a math error to a missing or incomplete Social Security number to the last name of a claimed dependent not matching IRS records.
However, the most likely reason you’re getting the letter is because of the economic stimulus payments. If your gross adjusted income exceeds $75,000 (or $150,000 if you’re married and filing jointly, or $112,500 if you are the head of household), then you might have to pay some of that stimulus check back.
If you believe the adjustment is in error, the IRS is encouraging taxpayers to call the IRS at (800) 829-8374 to review their account with a representative. You have 60 days to request an abatement for the amount owed. In that time, you can provide additional documentation to the IRS to explain why you shouldn’t have to pay. However, the IRS notes, “if you don’t provide us additional information that justifies the reversal and we believe the reversal is in error, we may forward your case for audit.” If you don’t contact the IRS within 60 days, however, you lose all rights to reverse the charges and cannot appeal it, though you can claim a refund after it’s paid.
If you have additional questions about your specific circumstances, please reach out to your BiggsKofford team member or contact us HERE!