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The IRS misled tens of thousands of taxpayers that they would not receive their wages.



stimulus check

For thousands of taxpayers, April Fools’ Day came early.

Spam from the IRS encoded as “CP21C”, informed recipients that the agency had been compensating stimulus payments due to potential federal debt for 14 years.

Messages were sent in January to more than 109,000 people, according to the Taxpayer Defense Service. It was a mistake, but another flaw in motivational relief distribution efforts.

The IRS is rushing to fix a bug that sent millions of stimulus payments into the wrong bank accounts

“It’s very frustrating,” national taxpayer advocacy Erin M. Collins said in an interview. “I know the IRS has its suffering and we’re all trying to be patient with the pandemic. But at the same time, these are things that shouldn’t happen.”

This error is due to the IRS implementing two sets of stimulus payments. The Coronavirus Relief, Relief, and Economic Security Act, or Welfare Act, was passed in the spring, and authorized payments of up to $ 1,200 for individuals and $ 2,400 for spouses who apply together, based on 2018 or 2019 federal returns. The IRS will provide the first round of payments. Stimulus by December 31.

The latest supplemental bonus bill for response and coronavirus, passed in late December, requires additional stimulus payments of up to $ 600 per adult ($ 1,200 for couples).

The payments were a prepayment on a tax credit referred to on the 2020 Form 1040 as a “Refund Credit”. Advances were eligible for payment in two rounds during 2020 and early 2021. Congress has set deadlines for the IRS to make the payments.

Faced with a buildup of 2019 revenue, the IRS has sent a notice to CP21C informing people that they will have to wait until they submit their return for 2020 to receive relief, because the agency did not meet the December 31 deadline. Collins said in a blog post that false notifications are another example of the consequences of outdated technology for the agency.

Don’t file a paper federal tax return for 2020 if you don’t have to, as the IRS watchdog warns.

In some cases, the IRS notice said: “We have added credit to your 2007 tax account due to the new legislation. We are using (compensation) all or part of the economic stimulus payments to pay your federal taxes as permitted by law.”


Collins said that the IRS ‘computer systems may have mistakenly sent messages from the last time Congress authorized stimulus payments compensation, during the Great Recession.

What would be even more confusing is that some taxpayers may eventually forfeit all or part of the stimulus payments, unlike taxpayers whose payments have already been processed. The IRS may reduce recoveries, including the portion attributable to recoverable credits, to meet delinquent federal tax debt.

Many people may not receive the promised stimulus payments if they owe back taxes

Nina Olson, a former taxpayer attorney who is now CEO of the Center for Taxpayer Rights, said there are several posts in an American Bar Association’s email group for tax clinics about clients who receive notifications that their incentive payments have been compensated.

“There are messages indicating some fiscal years that taxpayers are not complying with them,” Olson said. “For me, this only indicates that if we’re going to use the IRS to process payments like this, we need to set up a separate system that works simultaneously with the tax filing system.”


Brette Gollihare, low-income taxpayer clinic director at Legal Aid Services in Oklahoma, said she heard from a state client who received a letter from the IRS stating that the stimulus payments had been applied to tax debt late from 2007. The client does not owe taxes.

“This client ended up receiving $ 600, which was the second stimulus boost, two days later, which surprised us,” said Goleher. But the client did not receive her first incentive payment of $ 1,200 and will have to claim it upon her return for 2020.

In the mea culpa report posted to on its Q&A page, the IRS says of the letter CP21C: “This notice is not accurate to anyone who received it. Because no payments were issued, no compensation has occurred and we apologize for any inconvenience caused. You can ignore the file avi

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