This past week a tax client received a notice from the IRS changing the 2020 tax return in the area of the Recovery Rebate Credit. The notice did not specifically state a reason for the change, but instead stated the "error" was in one or more of the following areas:The SS number of one or more of the individuals claimed as a qualifying dependent was missing or incomplete. No, the individual(s) claimed as a qualifying dependent and their SS number has not changed in 9 years and is correctly reported in the return.The last name of one or more individuals claimed as a qualifying dependent was missing or incomplete. No, the last names of the individual(s) claimed as a qualifying dependent has not changed in 9 years and is correctly reported in the return.One or more individuals claimed as a qualifying dependent exceeds the age limit. No, age of the qualifying dependent 9 years and is correctly reflected in the return and correctly included in the Recovery Rebate Worksheet.The amount was computed incorrectly (683D). By process of elimination, this must be the change made by the IRS for the amount claimed as the Recovery Rebate Credit on the 2020 tax return. But I do not understand why? The client received $1,065.97 for the 1st Economic Impact Payment and $515.97 for the Additional Economic Impact payment. Both amounts are correctly included in the Recovery Rebate Worksheet and were ACTUAL AMOUNTS RECEIVED, not estimated amounts. In addition the AGI for 2019 was $165,361 and the AGI for 2020 was $161,811. The AGI in 2020 actually decreased from 2019. What am I missing here? It appears that either the Lacerte tax program is wrong, or the IRS is wrong. If I am wrong, please point out to me where I am wrong based on this information. Any assistance would be greatly appreciated. Much thanks!Paul

Level 5

Question

Recovery Rebate Credit - The amount was computed incorrectly (683D)

Forum|Forum|4 years ago
August 23, 2021
4 replies
32 views

This past week a tax client received a notice from the IRS changing the 2020 tax return in the area of the Recovery Rebate Credit. The notice did not specifically state a reason for the change, but instead stated the "error" was in one or more of the following areas:

The SS number of one or more of the individuals claimed as a qualifying dependent was missing or incomplete. No, the individual(s) claimed as a qualifying dependent and their SS number has not changed in 9 years and is correctly reported in the return.
The last name of one or more individuals claimed as a qualifying dependent was missing or incomplete. No, the last names of the individual(s) claimed as a qualifying dependent has not changed in 9 years and is correctly reported in the return.
One or more individuals claimed as a qualifying dependent exceeds the age limit. No, age of the qualifying dependent 9 years and is correctly reflected in the return and correctly included in the Recovery Rebate Worksheet.
The amount was computed incorrectly (683D). By process of elimination, this must be the change made by the IRS for the amount claimed as the Recovery Rebate Credit on the 2020 tax return. But I do not understand why? The client received $1,065.97 for the 1st Economic Impact Payment and $515.97 for the Additional Economic Impact payment. Both amounts are correctly included in the Recovery Rebate Worksheet and were ACTUAL AMOUNTS RECEIVED, not estimated amounts. In addition the AGI for 2019 was $165,361 and the AGI for 2020 was $161,811. The AGI in 2020 actually decreased from 2019. What am I missing here? It appears that either the Lacerte tax program is wrong, or the IRS is wrong. If I am wrong, please point out to me where I am wrong based on this information.

Any assistance would be greatly appreciated.

Much thanks!

Paul

Lacerte Tax

This topic has been closed for replies.

joshuabarksatlcs

Level 9

The client received $1,065.97 for the 1st Economic Impact Payment and $515.97 for the Additional Economic Impact payment.

Double check the actual amounts received. Could it be that the amounts provided to you were off? That combination seemed to be at odds per my preliminary computation.

There is a way to check the IRS' records of EIP amounts. You may want to verify the accuracy of those amounts if you want to get to the bottom of it.

I come here for kudos and IRonMaN's jokes.

P

PPECPAAuthor

Level 5

Hi Joshua

Thanks for getting back to me. To answer your question, both amounts were tied to a website/app that my client screen shot and sent to me via e-mail. The site is as follows: sa.www4.irs.gov

Additionally my client then tied the same amounts to her bank account to confirm the deposits matched the amounts shown on the website. The amounts are rock solid.

BobKamman

Level 15

What was the refund/balance due on the original return, and what is the amount as adjusted by IRS?

G

garman22

Intuit Community Champion

I agree with both above. I would have client double check the stimulus amounts deposited (although they seem to jive re: the cents of both). Could be the IRS is wrong (which is where I'd bet). I have had one too and in this case it was client who was off.

As far as @BobKamman advice, I would look at difference and see if its EVEN worth going after. I had a single mom whose was adjusted and she waited 14'ish weeks and it was less than a $100. She said "Oh, hell no!!".....depends on client.

joshuabarksatlcs

Level 9

My wild guess:

Client's 2018 AGI: 180,357

RRC claimed $1,519

RRC as adjusted by IRS: $1,386

Difference: $133

The above was done last night after my nightly regimen of bourbon.

I come here for kudos and IRonMaN's jokes.

sjrcpa

Level 15

What was the RRC you showed on the return?

How much did IRS adjust?

The more I know the more I don’t know.

P

PPECPAAuthor

Level 5

Hey sjrcpa

See above post. The amount adjusted by the IRS notice is $1,591.97 which I believe was adjusted for a disallowed Recovery rebate credit plus or minus interest and other credits. The BTC is below as follows:

Rebate Tax Credit (1040 line 30) $1,936.00

Less other Credits (IRS calculated) $ 355.02

Interest (IRS Calculated) $ 10.99

Amount due to IRS $1,591.97

What I don't understand is why the Rebate Tax Credit was disallowed?

G

garman22

Intuit Community Champion

I literally got a client today whose RRC was reduced $333. This is not a small amount (smaller than the $1500 with your client).

My client states she did not receive a 2nd stimulus payment. So, I properly showed the correct amounts. My figures are as they should (ProSeries) be. It is either IRS error or IRS will state taxpayer received 2nd stimulus.

My question is, does IRS provide copies of cancelled checks?

P

pgsinclaircpa

Level 2

Just this week I have had 6 clients so far that have said they received notices from IRS changing the recovery rebate, and the amounts entered in Lacerte were correct. Is there a problem with the calculation Lacerte is doing?

joshuabarksatlcs

Level 9

There have been discussions along this line in a few other threads. So far, my fellow tax professionals' responses are still along the line of:

Check your math; Check clients' info.

Folks who raised the questions would then turn quiet.

@PPECPA originally rode on this dead horse. He stated there was NO mistake on the taxpayer / preparation ends. Perhaps he will update us after 10/15 on his findings.

I come here for kudos and IRonMaN's jokes.

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