You are not alone. The IRS has sent over 5 million of these math error notices regarding the stimulus or Rebate Recovery Credit. These are a CP 11 or CP12 notice (because of the number at the top in the right hand corner). A redacted example can be found here.
This notice is frustrating for several reasons. First, it does not tell you why the IRS reversed your credit. It lists five reasons and then says it is because of one of them.
Next, for many people, none of the reasons seem to apply. For example, the first three reasons apply to dependents. They are (1)the Social Security number of a qualifying dependent doesn't match, (2)the last name of a qualifying dependent doesn't match, or (3)a qualifying dependent doesn't meet (exceeds) the age limit.
Yet, the IRS is allowing the child tax credit, the earned income credit and the additional child tax credit for the same dependents on THE SAME tax returns taxpayers are requesting the stimulus or Rebate Recovery Credits. The social security number, last name and age requirements are similar. The age requirement may differ slightly, but in general, if you received one of these credits, the reasons the IRS lists for reversing these credits do not make sense.
As for the fourth reason, looking at your tax return should tell you if you exceed the income limits. If you do not, once you check theà
The final reason, whether you calculated the credit incorrectly (admittedly, possible to do), if you check and believe you are still owed the credit, what next?
Math error notices are an easier way for the IRS to assess tax without describing the steps the taxpayer must take to disagree and trigger a notice that will allow a petition to Tax Court. Usually there is a sentence buried that explains taxpayer rights, but mysteriously, on these notices regarding the stimulus, the sentence explaining what to do is missing.
These notices tell taxpayers to call the IRS if you disagree. Anyone who has tried to call the IRS this year knows that calling the IRS this year is at best challenging and at worst impossible. Statistics I have read indicate the IRS has answered 2-16% of its calls this year.
So, what should a taxpayer do if none of the reasons for the change listed in the letter seem to apply? A section of the Internal Revenue Code says to send a letter to the address on the notice within 60 days, “a request for an abatement of the assessment.”
So copy the letter you receive, write a letter addressed to the address on the letter, explain why none of the 5 reasons apply in your case, and send the original letter with your letter. Then wait.
What does this do? It means that if the IRS does not give you the money, they have to send that Notice of Deficiency that lets you file the petition in Tax Court.
If you don't do this, the IRS doesn't have to give you a chance to recover the credit after the 60 days pass. 5 million times the amount of stimulus checks reversed are a lot of reasons for the IRS to hope people don't follow up.
Here is a link on how to file in tax court pro se. https://www.ustaxcourt.gov/petitioners_start.html
If this seems too complicated, contact us for assistance.