I have a new client (a family) consisting of a Taxpayer and three dependent children ages 17, 4, and 8.

The taxpayer and all three dependents received their SSNs in 2022. 

I filed their 2020 and 2021 Income Tax Returns. Taxpayer had ZERO income to report for both years, but wanted to file tax returns for both years to claim the Recovery Rebate Credit and CTC. No CTC Advanced payments were received.

IRS sent the taxpayer a Notice adjusting the 2021 return.

Original Amount: $9,000 (CTC credit: $3,000 multiplied by three dependent children)

Adjusted Amount: $5,800

How is the IRS calculating $5,800?

Thank you!