Can a stimulus claim be reversed?

[PRTAX]

Client's son claimed stimulus. He is student and can be claimed as a dependent. Is there any mechanism to reverse the stimulus claim so the parent can claim the dependent?

[Just-Lisa-Now-]

No quick way.  Youd have to file an amended return for the son, then file the parents return on paper and both of those things are going to take who knows how long to be processed since the IRS is sitting on over 10 million pieces of unopened mail already.

Efile the parents return without the kid, then amend everyone later? 

[Just-Lisa-Now-]

I wonder if these dependents that filed the non filer and got the stimulus money are going to have to pay it back, they're not entitled to the money...its going to be an interesting few years going forward.

[BobKamman · Accepted solution]

You’re assuming that an e-filed return will be rejected? Have you tried it? Otherwise, file a paper return for the parents. In past years IRS has not rejected dependency claims that appear on two returns, when one of them is for the taxpayer being claimed.

At the same time, file an amended return for the kid. I’m not aware of any IRS procedure that allows them to claw back the EIP, though. He could try sending a check for $1,200 but I’m not sure they would know what to do with it. IRS might come up with an FAQ for situations like this, before the end of the year, so maybe wait.

Yes, IRS had 10 million pieces of unopened mail before they started opening Service Centers again last month. Only 5 million of those were returns. Most of them were 1040s, but in a busy month they plan to process 5 million of those anyway. So, they are a month behind. Let’s not be Chicken Little about the current situation. In most places, state revenue departments are keeping up with the situation (although it helps that the biggest Covid Deniers are in Texas and Florida).

[sjrcpa]

I've had two clients send checks in March who report that they have not been cashed yet, as of this week. So more than a month behind.

And yes I know and I tell them that paying electronically is a better idea.

[Just-Lisa-Now-]

CP2000 response with a check enclosed sent back in March is still not cashed either....youd think theyd still have someone fishing the money out of envelopes at that address!

[PRTAX]

Thank you for your help.

The headaches coming from this ;(

Pablo

[PRTAX]

The kid just did a non-filer in the IRS website obviously without reading the instructions.

Thanks for your help.

Pablo