The Internal Revenue Service (IRS) has long been criticized for its confusing and unclear math-error notices. These notices, intended to handle simple errors quickly, often leave taxpayers bewildered about the changes made to their tax returns or how to contest them.
Under new legislation signed into law this month, the IRS will make significant changes to these notices. The Math and Taxpayer Help Act requires the agency to provide more detailed explanations of the issues at hand, citing relevant tax code provisions and identifying specific lines or schedules impacted by the errors.
For instance, instead of a vague message like "There is an error in your Recovery Rebate Credit," a notice must now say something like: "We adjusted line 30 of your Form 1040 because our records show you already received the full Recovery Rebate Credit amount for which you were eligible. As a result, you are not entitled to claim an additional credit."
Taxpayers will have 60 days to request abatement or challenge the IRS's determination, with this deadline clearly displayed in bold font next to their address on the notice.
The law also establishes a pilot program requiring some math-error notices to be sent by certified or registered mail to convey a sense of urgency. The IRS must report on the program's impact to Congress within 18 months.
While these changes are expected to reduce confusion and anxiety, many tax practitioners don't anticipate swift action from the agency. With its skinnier budget and potential complications in the upcoming tax season, most experts believe it will take time for the IRS to implement these new guidelines.
Under new legislation signed into law this month, the IRS will make significant changes to these notices. The Math and Taxpayer Help Act requires the agency to provide more detailed explanations of the issues at hand, citing relevant tax code provisions and identifying specific lines or schedules impacted by the errors.
For instance, instead of a vague message like "There is an error in your Recovery Rebate Credit," a notice must now say something like: "We adjusted line 30 of your Form 1040 because our records show you already received the full Recovery Rebate Credit amount for which you were eligible. As a result, you are not entitled to claim an additional credit."
Taxpayers will have 60 days to request abatement or challenge the IRS's determination, with this deadline clearly displayed in bold font next to their address on the notice.
The law also establishes a pilot program requiring some math-error notices to be sent by certified or registered mail to convey a sense of urgency. The IRS must report on the program's impact to Congress within 18 months.
While these changes are expected to reduce confusion and anxiety, many tax practitioners don't anticipate swift action from the agency. With its skinnier budget and potential complications in the upcoming tax season, most experts believe it will take time for the IRS to implement these new guidelines.