recovery stimulus adjustments

[grandma o]

Is anyone else receiving notices that indicate the Recovery Rebate Credit was calculated incorrectly and the taxpayer refund has been reduced?  I just rec'd my third client phone call about it and I do not see where the calculation was done wrong, amounts recorded as received were entered correctly and a third party estimator tool I used to double check the numbers all came up with the same results.

[TAXOH]

I have one that I know of.  He claimed himself this year.   The IRS adjusted his return and gave him the $600 but not the $1,200.  The notice said the adjustment had to do with a name, social security mismatch on a dependent claimed on his return.  He filed single with no dependents.   He also received a separate deposit of $1,400 for the third stimulus.   It makes no sense that he would get the first and third but not the second. 

[BobKamman]

Your client told you the EIP was not received, and you believed it?  I have a condo in a Florida high-rise that I'll sell you cheap.  We made every effort to check which payments had been made, until IRS pulled the rug out from under us by deleting data from "Where's My Payment."  I haven't heard from anyone yet, who claimed an EIP that was tossed as junk mail, but I expect a few cases.  And they will have to check their IRS account themselves -- signing up for the process isn't quick and easy, but that's the best way to figure out what happened.  Or, maybe the reduced refund will be followed in a few weeks by a notice that halfway makes sense.  

[George4Tacks]

I think the key phrase is "and a third party estimator tool I used to double check the numbers" as opposed to the 1444 forms that the clients did not keep. We ask "Did your get your Stimulus Payment?" they respond "I don't remember." and we try to guess as to whether they did or not. 

I currently have a client on extension because of EIP1 - they never deposited what was likely a debit card they tossed as junk mail. I am trying to get the card reissued because their 2020 income increase and the $2,400 will evaporate. 

[TAXOH]

On my client his parents had claimed him in 2019 because he was a college student in his final year so I know he didn't receive the 600 or 1200 because he didn't claim himself in 2019.

[George4Tacks]

Did he file in 2018? Maybe (I am just guessing) he got the $1,200 in March before the parents filed. Then he did not get the $600. He now qualifies for the $1,800 but he "forgot" he received the $1,200.

[TAXOH]

No, this was his first year claiming himself.

[grandma o]

thank you for all your responses.  To clairify, none of the 3 clients had kids, so we aren't looking at the double payment issue, the recovery credits reported were verified by bank statement entries and I used a third party estimator to confirm both my calculations and the intuit calculations.  All matched.  Been a crazy year, thank you for your input.

[IRonMaN]

We had a fun one last week.  Guy dies in January 2020.  Brother-in-law handles the estate.  First stimulus payment comes and he mails back the check like all responsible Americans are supposed to do.  Fast forward to 2021.  Return is filed claiming the full recovery rebate plus reporting $900 in withholding that is all coming back since there was no tax on the return.  Total refund due is $2700.  The non-dead guy gets a notice saying they are adjusting the return and a refund of $300 will be sent out.  We inform him that the notice could just be bogus so wait and see what the actual check is.  He is hot to trot because he wants to get the estate done and over so he calls the IRS.  The IRS person tells him tough luck if he sent the check back but there is an error on the notice so he really should be getting back $1200 ($600 plus $900????).  I'm not sure what kind of math major the IRS person has, but our guy just wants to move on so he'll take whatever the IRS wants to give him at this point.

[BobKamman]

I understand how receipt of an EIP can be verified from a bank statement.  But how does it help verify that a debit card was tossed out or a refund check was sent to the wrong address, or stolen from a mailbox?