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You all starting to get client calls on the new letter? If I wasn't already calming all the clients down about the "miscalculation" of their recovery rebate credit letter now I'm talking to them all again quelling the "panic" calls over this new letter. No one reads it and the ones that do still don't understand it.
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Agree Agree. Client mailed me their copy with the words case for audit underlined. Wonderful.
My take on the letter is - IRS isn't sure if the changes they made for RRC are correct so call to let them know.
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Thanks for the information
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@dkh you hit the nail on the head... Corporate client received letter back in January that they were disallowing the overpayment credit from 2018 to 2019... but the letter said if you think we made a mistake with your payments then please let us know... If they have a hunch that there is an error why do they send out the letter to begin with and wouldn't it be better for them to check their records first before sending it out... Alfred Hitchcock can make a movie out of this and call it "the year of the letters"
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I warned clients who claimed an RRC that it was based on what we knew about how much they had received in the first two EIP's, so if IRS had better information they could expect an adjustment.
Then when clients told me the RRC had indeed been adjusted, I explained to them that the notice they received did not comply with the law that IRS must follow when changing what is called a "math error." So, they should expect a follow-up letter informing them of their appeal rights. For those who try to keep up with current events in the tax world, this was general knowledge.
Now when they call, I just remind them this is the letter where IRS admits, very obliquely, that they screwed up by not telling them what they could do if they disagreed with the first letter. And of course, if we had good reason to disagree with the RRC adjustment, we have already notified IRS so the ball is back in their court.
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@BobKamman wrote:For those who try to keep up with current events in the tax world, this was general knowledge.
Wow....rather judgmental of you don't you think ?!?
In my case, client never told me they received a letter regarding refund adjustment for the RRC.
Hard to be prepared when you don't know anything has happened.
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@dkh You wrote, "My take on the letter is - IRS isn't sure if the changes they made for RRC are correct so call to let them know."
Pardon me for being judgmental, but if you knew what was going on in the tax world that would not have been your take.
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Nice to know that I am not alone...been getting several messages while traveling the last couple of weeks.
Every enjoy the last few days till October 15...then relax for a few before it starts all over again.
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Here is what IRS has to say https://www.irs.gov/individuals/understanding-your-letter-6470
Here is what Spidel Publications has to say https://www.caltax.com/news/flash-email/2021-52-irs-sending-incorrect-and-incomplete-recovery-rebate... Even though this is primarily a California Tax based business they do very helpful federal news. Sign up for their Flash E-Mail at the link in the box to the right in this link https://www.caltax.com/news/flash-email/
They just sent out a Client Letter for attendees of their seminars to send to clients about the 6470.
If you have not yet seen a Letter 6470, here is what is says (The date and client name is different on each, but the text seems to be the same)
Answers are easy. Questions are hard!