How do I deal with a letter from IRS which states that my client owes them taxes but does not take into account that he already paid a portion of those taxes?

[2084]

My Clients e-filed their taxes in April and had a direct  withdrawal from his bank account for $3900. in payment of their balance due. They claimed a partial recovery rebate credit.   They just received a letter from IRS stating that they  owed $5200.00 and  IRS did not acknowledge that they had already received the $3900.00 on April 13th.   I told my clients to go to IR.gov/account which they did and the $3900.00 had been received.  I'm not sure whether to amend the return or attach the screen shot in a reply to the IRS letter.  Also I want to go over the recovery rebate letter to check for any errors even though they earned just over $156,000. they still received $1260.00 credit.  Thanks for any input!

[Just-Lisa-Now-]

the computers that send out balance due notices aren't directly connected to the computers that record payments.

Id either send proof of payment back with a response, OR just wait it out, it will eventually match up....just depends on how big a PITA the client is and if they demand some kind of action or are fine to wait it out.

[dkh]

Have you seen the IRS letter?  IRS wants $5200 but return balance due was $3900 - why the difference? From my experience, the letter will detail the difference between return calculations and IRS calculations.  Could be RRC - is that what the letter says?  Did client make estimated tax payments?  if so, did IRS receive all the payments?

Why would you amend?  Is the return not accurate?  

[2084]

Hi!  The Clients just replied to me and said that they checked their bank account again and had indeed received a 3rd recovery rebate credit.  Previously they had told me that they had not when I prepared the return.  So not sure if I need to amend because I can just have them send in the amount that is owed ($1260) and proof of the previous payment?

[Just-Lisa-Now-]

if they already got the EIP and IRS has corrected for that, you have nothing to amend for, just send payment....that previous payment will eventually match up, but if youve got proof of payment handy, you could send that as well.

[2084]

I advised my clients to increase withholding with their companies rather than make estimated payments.  Their only Payment was a direct deposit to IRS.

[2084]

Thanks Lisa!  You came through for me again!   Kathy

[dkh]

Didn't client provide you the 6475 letters ? 

 I did not do a 2021 tax return without the letter(s) or some documentation of proof of EIP#3 amount.   Unless I knew client was not eligible to receive the EIPs.

[2084]

He supplied letters for 2020 but did not receive one in 2021 or 2022.