The IRS is sending letters to millions of parents who received advanced Child Tax Credit payments last year. But Monday, they warned some letters may include incorrect information.
The erroneous information could have a severe impact on some families' finances, given that the IRS is advising taxpayers to take extra care this year that their tax returns are accurate. The agency is still digging out of a backlog of 6 million individual returns filed in 2021 — many of those were flagged for review because of mistakes taxpayers made in reporting how much they received in government stimulus payments or other tax credits.
A tax refund is often the biggest check a family receives each year, with payments in 2021 averaging about $2,800. That means there's a lot on the line if a family misreports the amount they received in their advanced CTC payments. A processing holdup at the IRS could result in refunds being delayed for weeks or even months.
The IRS said it is unclear how many people received erroneous letters, but said it could be a small group of taxpayers who moved or changed bank accounts in December. In those cases, the CTC checks may have been undeliverable, or the direct deposits bounced from the bank where an account was closed, Ken Corbin, the IRS chief taxpayer experience officer, said Monday on a conference call with reporters. "Then the letters may not reflect what the taxpayer actually received," Corbin said.
Taxpayers who are concerned the letter they received isn't correct should check IRS.gov and log into their account through the site, he said. The IRS.gov website will have the correct information that the taxpayer should use on their tax return, he noted. "We want taxpayers to have the info they need to file an accurate return," Corbin said.
This is an example of Letter 6419 that the IRS is sending to parents who received advanced Child Tax Credit payments in 2021. The IRS is asking taxpayers to keep the letters and refer to them when preparing their tax returns in order to accurately record the amount they received last year. However, the IRS said on January 24 that some letters were mailed with erroneous information on payments.