IRS Adjustment

[Fletcher]

IRS disallowed the Recovery Rebate Credit and client did not disagree.  How do I adjust PS Basic original 2020 return to be consistent with IRS' adjustment to client's master file?

[PATAX · Accepted solution]

Why was the credit disallowed? If something is going to affect next year's return from this then maybe you do want to change it... But if it is not going to have any effect on next year's return then why would you want to change the return that you filed... Just keep the letter from the IRS in the client's file... just my opinion...

[Just-Lisa-Now-]

go into the RRC worksheet and enter that they got it all as an advance (lines 16 and 19), leaving RRC as zero

[Just-Lisa-Now-]

that would be my approach as well, but I guess if 2 years from now they try to re-fi and the copy of the return they provide doesnt match the transcripts from IRS, the lender may give not be able to grasp the reason why they're different.