Many parents who received advanced Child Tax Credit payments last year are receiving letters from the IRS informing them to refer to these forms – letter 6419 – when filing their taxes this year.
The agency, however, warned that some of those letters may contain false information on Monday.
As the IRS warns taxpayers to take extra care this year to ensure that their tax returns are accurate, the erroneous information could have a severe impact on some families’ finances, as per a CBS News report.
As of 2021, there are still 6 million individual tax returns awaiting processing.
Families receive an average of $2,800 in tax refunds in 2021, the largest check of the year.
Families are highly at risk if they fail to report the amount they received in their advanced CTC payments.
It’s possible for refunds to be delayed for weeks or even months due to a processing holdup at the IRS.
Despite the IRS’s unclear estimate of the number of erroneous letters, it is likely that some taxpayers who moved or changed bank accounts in December received the erroneous letters.
On a conference call with reporters Monday, Ken Corbin, the IRS chief taxpayer experience officer, said that the CTC checks weren’t delivered or the direct deposits bounced at the bank where the accounts were closed.
“Then the letters may not reflect what the taxpayer actually received,” Corbin said.
If taxpayers are concerned their letter is incorrect, they should log into their account at IRS.gov, he said. A taxpayer should use the IRS.gov website to obtain the correct information for their tax return, he explained.
“We want taxpayers to have the info they need to file an accurate return,” Corbin said.
A Sign of Hope
Moreover, the government launched a new website on Monday to assist those who were eligible to claim the remainder of the expanded child tax credit.
Treasury Department officials said a new site, ChildTaxCredit.gov, provides guidance for taxpayers on how to claim the credit, as well as eligibility information.
Support will be available in multiple languages both online and by phone.
Read More: Thanks to the Economic Stimulus Act, You May Be Able to Receive Up to $5,000 in a Tax Refund.
This Filing Season Was “Very Frustrating”
Tax preparers and taxpayers could be aggravated by these potentially incorrect letters, as IRS commissioner Chuck Rettig warned.
Also, he offered the following tips to taxpayers to ensure that their returns will be processed smoothly:
1. Electronically file your return.
2. After the IRS begins accepting tax returns on January 24, file as soon as possible.
3. Make a direct deposit request.
“If taxpayers need a refund quickly, we are urging them to not file on paper,” Rettig stated.
An inaccurate return could “create an expensive delay,” he continued.
According to the IRS, taxpayers who heed this advice and file a tax return without any red flags should receive their refund within 21 days.
Corbin said that at this point, the IRS isn’t sure how long it will take to process a refund if someone files on paper or makes a mistake in their return.
It is important to report accurate information about the advanced CTC payments since the enhanced tax credit was partially paid in advance, with the remaining half being paid to taxpayers in their refunds after they file their 2021 tax returns.
As an example, tax credits of $3,600 are available to families with children under six, with $1,800 paid monthly from July 2021 to December 2021.
Of the remaining $1,800, they can claim it on their 2021 tax return.
However, the IRS will flag the return for review if a family incorrectly claims they received $1,500 in CTC payments and claims a refund of $2,100 on their tax return.
Rather than being sent to millions of parents, Corbin believes the error letters were sent to a small group of taxpayers.
“The online portal is correct, and we encourage them to check IRS.gov,” he added.