When you filed your 2020 tax return, we asked if you had received any stimulus money. You may have had the exact amount for us, or you may have given us your best guess. If the IRS cheaped out on your original stimulus payment/s, you should have received the missing stimulus money as part of your refund.
When the IRS reviewed your tax return - as they did for many people, since the stimulus payments and unemployment exemption made this year's filing much more lucrative for nefarious evildoers! - they checked your reported stimulus amounts against their Recovery Rebate Credit payments to make sure that they matched. If they did, then no problem, take your money!
If the amounts did not match, the IRS reduced your stimulus refund according to what their records show. You should have received a letter informing you of the refund reduction and the reason.
Why was my refund reduced?
That is what we hope to find out! Some possible answers are:
Typos in the names or social security numbers listed on your return. ◉ If this were the case, our software would notify us that your e-filed return was "REJECTED", and we would have resolved the issue immediately.
Your gross income reported on your tax return was lower than the IRS calculation, based on reported money paid to you. ◉ This could happen if you were missing a W2 or 1099 when your taxes were prepared.
One of your dependents does not qualify. ◉ Our software automatically calculates the qualification factors for the Recovery Rebate Credit.
You already received the entirety of your stimulus. ◉ We prepared your tax return with the stimulus information that you provided to us. If you believe there is a discrepancy, create an account on the IRS website to see your stimulus information. The information below will help you if you do not agree with the IRS.
So what is this new letter about?
This new letter is clarifying your right to appeal. Some taxpayers received a notice that their refund was adjusted by a few dollars - you don't need to appeal. Others, however, had their refunds adjusted by hundreds or thousands of dollars - and for you, we recommend the following steps:
Collect the data for every stimulus payment and federal refund that you have received since January 2020 - including any monthly Advance Child Tax Credit payments that you may have received. Record the deposit date, the transaction description, the exact amount, the bank name, and at least the last four digits of the account number. ◉ Remember! Your bank information should be kept secure. ◉ There are two easy ways you might use to get this information: ➢ Call your bank and ask for a transaction list of all IRS payments since January 1, 2020. ➢ Use your banking website's search bar to find all transactions using the keyword, "IRS". This may be limited by your bank's ability to go back as far as January 2020.
Let us know what your first and second stimulus data, and we will compare it to your tax return. ◉ The first stimulus was paid out to most people around April 15, 2020 ◉ The second stimulus was paid out to most people around January 5, 2021. ◉ Some people received their stimulus payment late.
If everything checks out on our end, we will direct you to call the IRS representative phone number that is listed in the letter. The representative will be able to tell you exactly why the IRS reduced your refund, and will instruct you on how to formally appeal the decision. ◉ Sounds like a hassle? Ask us about our IRS Representation service!
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