In a late twist in the stimulus check fiasco, a number of taxpayers have been perplexed after receiving two IRS letters.
The IRS had made a few changes to the individual's tax returns, according to the initial letter handed out by the agency. The taxpayer may owe the agency money or receive a refund as a result of these adjustments.
It's also possible that they have a zero balance and everything is great with them. The misunderstanding arose when many taxpayers began receiving a second letter, which referenced the first letter and informed the recipients that they had the right to revoke the previous letter.
There's additional stimulus payment coming
The second notification also expressed regret for not mentioning the clause allowing taxpayers to repeal the first time around. Following the receipt of a stimulus check, the second letter has prompted many individuals to wonder if this is a scam, with posts flooding Facebook and other social media groups.
The IRS has said explicitly that this is not a scam. As revealed a few months ago, the government had previously issued roughly 5 million faulty math mistake letters that apparently neglected to remind taxpayers of their right to appeal the claims. Surprisingly, these letters were issued to those who had applied for the recovery rebate credit, as per Digital Market News.
This credit allows people to claim their stimulus checks if they haven't previously gotten one for the uninitiated. The message went on to say that the rebate amount was less in some circumstances or that they weren't entitled to a recovery rebate in others.
If you have already done your math and still feel you are entitled to the stimulus check, you must file an appeal within 60 days, but you may be required to provide documents to prove your eligibility.
New letters from the IRS may be appearing in the mailboxes of taxpayers who claimed the recovery rebate credit, which might mean that additional money is on the way. However, such letters might also mean that their Recovery Rebate Credit would be withheld or reduced, so taxpayers who wish to contest the letters must move quickly.
Who will receive stimulus checks in Recovery Rebate Credit?
The two documents highlight an IRS calculation error and provide a chance to contest the amount of the Recovery Rebate Credit that will be applied to 2020 tax returns. The first form will be designated CP 11, CP 12, or CP 13, and the second will be labeled letter 6470 and should come shortly after.
According to Fast Company, the CP letter informs taxpayers of the computation error, which may mean they are due a refund, owe money, or don't need to take any further action.
However, the 6470 letter, which arrived at the same time as the CP notification, informs taxpayers of their ability to appeal the first notice. Many receivers received error letters informing them that they weren't qualified for a recovery refund after all or that they would be paid out less than expected.
However, beneficiaries may be entitled to credit in some situations. Those who got the letters have sixty days to file an appeal, and they should be prepared to offer extra documents to support their claim, as per The Sun.
Individuals and married couples with an adjusted gross income of $150,000 or less can deduct up to $10,200 in unemployment from their taxable income under the America Rescue Plan, signed into law by President Joe Biden in March.