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I was Getting a Refund but Got an IRS Bill . . . ?
Been getting a lot of calls for IRS Notices. Most of them seem to be related to the Stimulus Payment or “Recovery Rebate Credit”.
The Recovery Rebate is a reconcile. Taxpayers not receiving the full amount of stimulus payment one (Paid out March-May 2020) or Stimulus Payment two (paid out January thru March 2021), can claim the balance they were “shorted” on their 2020 tax return as the Recovery Credit.
If stimulus payments reported on 2020 tax forms are different than the IRS records, the IRS will manually reconcile those returns, correct the stimulus payments and change any refund or tax due based on the Stimulus Payment/Recovery rebate calculation (see instructions for line 30, 2020 IRS Form 1040 instructions).
CAREFUL! IRS can make mistakes. Have your tax pro review the Notice. If Stimulus Payments were direct deposited, review bank statements from the time periods above to verify IRS records. If the IRS Notice is incorrect, ask your tax pro to help you to timely respond (within 30 days of the IRS Notice Date) to the IRS Notice. . .
Moral: Be accurate with the amounts put on the tax return. Inaccuracies can BITE!
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