IRS notice cp05 letter

[PATAX]

This is the first time I can ever recall one of my clients receiving a cp05 letter. The return was electronically filed and accepted on April 16th. It is a married filing joint return and they have four children. Standard deduction. With the four children they do have a large child tax credit and I think that is why the return is being held up. Other than that they have a small credit for child care and a small retirement contribution credit. The letter says that they are reviewing the return and they list a few items that they may be looking at ; income , , ,income tax withholding, and or tax credits. Has anyone else received this letter? What is also interesting is the taxpayer received a separate letter and his spouse received the same letter. I do not know why they split the letters up since they have always been married to each other and there are no issues there.

[dkh]

I have one client that received a CP05 letter (or only one that has called me).  Yep, taxpayer and spouse each received the letter.  This is common practice with IRS to send each a letter.

This particular client has been fuming that he hasn't received his refund.  Calls me once a week to tell me how upset he is.   I keep reminding him - I do not work for the IRS.  I was glad he got the letter, it backed up what I had been telling him about the delay of his refund. Funny thing, it only made him more p!$$ed off.  His complaint about getting the letter - says if they had time to send him a letter they had time to review his return. 

[BobKamman]

Are they claiming RRC?

[PATAX]

@BobKamman @dkh no recovery rebate credit on the return... They received the correct amounts in eip1 and eip2... they have two W-2s one for each spouse... No business income... return is about the same as it was in Prior years... It has to be the child tax credit for the four kids.  

[PATAX]

I did a little bit of research on this cp05 notice and from what I can discern there are situations where taxpayers are randomly selected... So it could be that also... who knows... The only good thing is the client has common sense and he is not worried about the delayed refund ..... I think in a month or two they will get the full amount...

[BobKamman]

IRS is getting dinged again by the Treasury Inspector General for Tax Administration (TIGTA) because of the high rate of improper payments on refundable credits.  See the report issued last month:

https://www.treasury.gov/tigta/auditreports/2021reports/202140036fr.pdf