Remember how you felt when your teacher marked something as “incorrect” on your homework, but the marking itself turned out to be incorrect? Well, millions of American taxpayers may feel like they are in this situation right now.
The Internal Revenue Service (IRS) has issued some 5 million “math error notifications” that failed to inform people of their full legal rights, according to an update from the Taxpayer Advocate Service this week. The letters, sent as a result of IRS corrections to people’s tax returns, made no mention of a key detail: that taxpayers had only 60 days to dispute the error in question.
“[O]the mission of this critical piece of information went beyond poor customer service; it was a flagrant violation of a taxpayer’s right to be informed and to a fair and equitable tax system, ”writes CAS in a blog post.
According to the TAS, the faulty letters were sent to taxpayers who claimed the recovery refund credit on their 2020 tax returns. The credit allowed people who had not received their first or second stimulus checks – or who had not received all of the amounts – to claim them on their returns and to receive them as part of a tax refund. As we wrote earlier this week, this option caused a lot of confusion over eligibility, resulting in a lot of legitimate math errors.
But if you’ve received a mathematical error notice from the IRS, you still have the right to dispute it within 60 days and request what’s called an automatic deduction, during which the IRS must reassess its correction. That is why it is essential that people be made aware of the 60 day window.
The good news is that the IRS is giving people who received one of these faulty letters more time. According to the CAS update, it will send additional notices to affected taxpayers and restart the 60-day window with the new notices.
It is important to note that although the IRS have people informed of the 60-day window, the math error notices he sent are still valid. If you’ve applied for the rebate credit by mistake – and it’s likely a lot of people have – disputing it won’t help much. You will still need to provide documents to prove your eligibility.
Having said that, the IRS (clearly!) Also makes mistakes. If you are eligible to receive this credit with your refund and the IRS denies you one, you should consider your options. Read the TAS blog article on the subject here, which explains your rights in detail.