In March 2021, President Biden helped millions of people by signing a bill to get $1400 checks as part of the American Rescue Plan. The bill also allowed people to save money through the tax code. It expanded the Child Tax Credit by more than 1000 dollars. This credit is now going to eligible families every month since August 2021. The extra financial help will continue till December 2021, after which changes may be made to the tax credit. However, some people are misusing the newly passed bill by asking for money that the IRS thinks they are not eligible for. Due to specific errors, these people have managed to get the financial help funds, but the agency is fixing bugs and sending letters to ineligible people asking for refunds. You can find out all about the Stimulus Update- IRS wants money back if you received this letter below.
IRS Financial Aid Bill
People are getting $1400 cheques for financial aid. Some of them, despite meeting the eligibility criteria, have not received the funds. These people can use the Recovery Rebate Credit to claim the funds on their taxes. However, some people are also misusing the bill and getting cheques even though they aren’t eligible. The IRS is correcting this error called Math Error Authority Part 2 and getting the money back.
The Taxpayer Advocate Authority explicitly states:
“ Specifically, in the calendar year (CY) 2020 through July 15, 2020, there were 628,997 math error corrections made on returns filed by taxpayers. For the same time in 2021, the IRS made about 9 million math error corrections on returns filed by taxpayers, about 7.4 million of which were related to the RRC.”
Eligibility Criteria for Financial Help according to Bill.
According to the bill, if an individual makes less than $75000 or $150000 if they are married, they are eligible for the funds. However, if they make more than this amount, they owe the IRS some money!
Changes in Tax Returns By IRS
Based on your current job and income, the IRS may send you a letter to inform you of any changes in your tax return. If you think the difference is wrong, you have the right to appeal against it!
Initially, the IRS did not clearly explain people’s right to appeal when it sent out CP 11, 12, and 13 notices to explain tax return changes. The agency apologized for this and sent out another letter, Letter 6470, to inform people of their rights! If you think it has errors, the difference must be appealed against within 60 days of getting the tax return notice.