HomeIRSThe IRS Warns Taxpayers Who May Have Received an Inaccurate Child Tax...

The IRS Warns Taxpayers Who May Have Received an Inaccurate Child Tax Credit Letter

Parents who received advanced Child Tax Credit payments last year are receiving letters from the Internal Revenue Service, urging them to use Form 6419, which is part of the advanced Child Tax Credit program. In a statement released Monday, the agency stated that some of the mailings may include erroneous information.

Given that the Internal Revenue Service (IRS) is recommending people to exercise particular caution this year to ensure that their tax filings are accurate, the incorrect information might have a significant impact on some families’ finances.

An estimated 6 million individual tax returns were filed in 2021, and many of those were flagged for review because taxpayers failed to report how much they received in government stimulus payments or other tax credits. The IRS is still working to clear the backlog, which currently stands at 6 million.

A tax refund is frequently the largest check that a family receives each year, with payouts in 2021 averaging approximately $2,800 on average per family. This implies that if a family fails to declare the amount they got in their advanced CTC payments, they could face serious consequences.

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If there is a snag in the IRS’s processing, refunds could be delayed for several weeks or even several months.

The Internal Revenue Service said it is unclear how many people received erroneous letters, but it is possible that a small group of taxpayers who moved or changed bank accounts in December were among those who received them.

In certain instances, CTC checks may have been returned as undeliverable, or the direct deposits may have bounced from the bank where the account had been terminated, according to Ken Corbin, the IRS’s top taxpayer experience officer, who spoke with reporters on Monday during a conference call.

In that case, Corbin cautioned, “the mailings may not reflect what the taxpayer actually got.”

According to him, taxpayers who are concerned that their letter from the IRS is incorrect should check IRS.gov and log into their account through the site, which is available 24/7. It is his understanding that the IRS.gov website will have the correct information that the taxpayer should utilize on their tax return.

In order to complete an appropriate return, Corbin added, “we want taxpayers to have the information they need.”

Website for the Child Tax Credit has been launched.

As part of its redesigned website, the federal government on Monday made it easier for people who were eligible for the enhanced child tax credit to collect the second half of the money they were entitled to.

According to the Treasury Department, the site, ChildTaxCredit.gov, includes a new tool that connects people to filing alternatives, eligibility information, and directions on how to claim the tax credit for qualifying children. The support will be available in a variety of languages, both virtually and in person.

“It’s been a very stressful filing season.”

According to IRS Commissioner Chuck Rettig, the potentially erroneous letters might make for “a very stressful filing season” for both individuals and tax preparers, which he warned could occur. He also asked taxpayers to follow these suggestions to guarantee that their returns are processed as efficiently as possible:

1. Submit your paperwork electronically.

2. File as soon as possible once the Internal Revenue Service begins taking tax returns on January 24.

3. Make a request for a direct deposit.

“If taxpayers require a refund in a short period of time, we strongly advise them not to submit on paper,” Rettig added.

It is possible to incur “expensive delays” if you file an erroneous return, such as by guessing how much you earned from the advanced CTC payments, according to the IRS.

According to the IRS, if people follow this guidance and their tax returns do not contain any red flags, they should receive their refund within 21 days of filing their returns.

When asked how long it might take to receive a refund if, for example, someone files on paper or makes a mistake on their tax return, Corbin responded, “Right now, we’re not really sure.”

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It is critical to report accurate data regarding the advanced CTC payments because the enhanced tax credit was paid in two installments: half in advance and the other half through taxpayer refunds when they complete their 2021 tax returns.

For example, families with children under the age of six are eligible for tax credits totaling $3,600, with $1,800 paid in monthly installments from July 2021 through December 2021 for each child under the age of six.

The remaining $1,800 will be claimed on their tax return for the year 2021. A family who mistakenly states they received $1,500 in CTC payments last year and then claims $2,100 on their tax return — more than they are entitled to — will have their return flagged for investigation by the IRS, which will result in a longer wait for their refund.

Mr. Corbin believes the incorrect letters were delivered to a small group of taxpayers rather than to millions of parents, as had been reported. “The IRS.gov website is correct, and we advise people to double-check it,” he said.

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