Stimulus checks – IRS mistakenly tells over 109k Americans they WON'T receive Covid relief payment
THE Internal Revenue Service has mistakenly told more than 109,000 Americans they would not be receiving their Covid relief payments.
Letters, referred to as "Notice CP21C," were accidentally sent out to thousands of taxpayers back in January 2021 – prompting many US citizens to lose hope on obtaining their third round of stimulus checks.
Taxpayers who received the misleading letter had been notified that their awaited-stimulus checks had been applied as a credit to taxes filed 14 years ago.
The Taxpayer Advocate Service revealed the widespread error on February 3 in an NTA Blog post titled: "Economic Impact Payments: The Mystery of the CP21C Letter."
Recipients of the letter were told: "We applied a credit to your 2007 [that is not a typographical error!] tax account due to new legislation.
"We used (offset) all or part of your economic stimulus payment to pay your federal tax as the law allows.
"As a result, you don’t owe us any money, nor are you due a refund.”
However, the IRS revealed the notice is "not accurate" for any of its recipients.
"Since no payment was issued, no offsets occurred. We apologize for the confusion this may have caused. You can disregard the notice," the IRS stated in a Q&A section on its website.
"You can claim the Recovery Rebate Credit on your 2020 tax return if you are eligible."
For anyone who may owe federal debts, the IRS offers some insight about how Economic Impact Payments could be offset.
Taxpayers who owed past due child support had their first relief payments offset.
However, the second Economic Impact Payments "were not offset for any federal or state tax debts – or if the taxpayer owes past due child support," the IRS explains.
In response to the IRS' recent mistake, National Taxpayer Advocate Erin M Collins called the incident "very disheartening."
Speaking with The Washington Post, Collins said: "I know that the IRS has its struggles, and we are all trying to be patient because of the pandemic.
"But at the same time, these are things that just shouldn’t be happening."
Meanwhile, taxpayers who file their tax return early could receive more stimulus cash in the third Covid relief package.
On Friday, the House passed a new $1.9trillion Covid relief package, but the details of when exactly additional $1,400 stimulus checks will be sent are still unclear.
Since many Americans made less money in 2020 than in 2019, due to the Covid pandemic, it could be beneficial to file last year's taxes before those checks start going out.
Check sizes in the past two stimulus packages were based on how much income a household made in 2019, and family size.
If your income was lower for 2020, or your family size grew, the stimulus check the IRS doles out could be bigger if you file early.
If you wait to file taxes, the IRS will likely use your household's 2019 income and family size again to calculate your eligibility for the next check.
However, if you file shortly after the IRS begins accepting returns – on February 12 – there's a strong possibility that the agency will use your 2020 income and family size.
If you file electronically, the return becomes available to the IRS almost immediately.
On Friday, President Joe Biden vowed to "act fast" to get $1,400 stimulus checks to Americans during a press conference.
"I'm going to help the American people who are hurting now," Biden said.
Biden also confirmed that the relief payments would not be cut down.
"Here's what I won't do: I'm not cutting the size of the checks," he said. "They're going to be $1,400. Period. That's what the American people were promised."
The $1.9trillion package was approved with instructions for committees to write their parts of Covid-19 relief legislation, based on Biden's plan, by Feb 16, according to reports.
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