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In our previous blog, we highlighted the IRS’s procedures to correct missing Economic Impact Payments (EIPs) and how TAS can assist some taxpayers. The table below sets forth the scenarios the IRS will currently resolve, what some individuals need to do before an EIP is issued, the scenarios where individuals will need to claim the correct payment on their 2020 tax return, the types of cases with which TAS can assist, and how taxpayers can get help.
The table identifies ten EIP scenarios. The IRS has corrected or will soon correct the EIP underpayments for the first three of these scenarios. For example, in the first scenario, an individual who used the Non-Filer Tool prior to May 17 and claimed at least one qualifying child may not have received the qualifying child portion of the EIP because of a programming error. The IRS has started issuing additional payments to these individuals, and we anticipate all additional payments will be received by the end of August. If for some reason the IRS’s current programming correction does not fix a specific individual’s situation in this scenario, TAS will be able to assist the affected individual.
For the last four scenarios, the IRS currently does not have a process in place to adjust these EIP distributions. These individuals will have to claim any additional amounts for which they’re eligible on their 2020 tax returns in 2021. For example, if the IRS calculated the EIP based on a 2018 tax return and the taxpayer’s situation changed in 2019, the IRS is requiring the individual to wait until next year to receive any additional payments. One fact pattern involves the birth of a child in 2019. After receiving the EIP, the individual filed the 2019 return, which would have qualified for the $500 dependent benefit. The IRS has instructed these individuals to adjust the difference with the filing of their 2020 tax return. Unfortunately, for the last four scenarios, TAS cannot assist taxpayers because the IRS is unwilling to create procedures to make the additional payments this year.
This is not a good answer for taxpayers. Congress authorized EIPs to assist the tens of millions of Americans who are suffering financial hardships as a result of COVID-19 closures, and many of these individuals need their stimulus payments now. The CARES Act, in fact, directed the IRS to make payments “as rapidly as possible.” On June 16, I issued a proposed Taxpayer Advocate Directive that directed the IRS to “immediately develop a process to correct EIP errors in instances where an eligible individual has not received his or her EIP or has not received the correct amount.” Since that time, we have held continuing discussions with the IRS about these issues, and I am pleased that the IRS has agreed to correct EIP errors in certain categories of cases. However, many eligible individuals have not received all or part of their EIPs due to circumstances the IRS has not agreed to resolve. We continue to urge the IRS to resolve all EIP cases this year for those taxpayers still waiting.
Taxpayers can call the EIP toll-free line at 1-800-919-9835 for general EIP questions or assistance with a specific issue. For taxpayers unable to resolve their issues with the IRS, who meet TAS criteria, and whose issues fall into the one of the first five categories below, TAS can help. Affected individuals may reach TAS toll-free at 1-877-777-4778.
The ten scenarios described in the table below encompass sources of EIP non-payments or underpayments experienced by many eligible individuals, but this is not an exhaustive list. Given the large number of intended EIP recipients and the wide range of individual and family circumstances, there undoubtedly will be many other fact patterns that occur in smaller numbers.
This chart was prepared by TAS based on discussions with the IRS and is not an official statement of IRS position. The information below reflects TAS’s understanding of the processes as of August 10, 2020. We will continue to provide updates as information changes or new information becomes available.
APPENDIX A: THE IRS’S CURRENT PLANS TO ADDRESS 10 SCENARIOS INVOLVING MISSING ECONOMIC IMPACT PAYMENTS (EIPS) AND WHETHER TAS CAN ASSIST¹
|Issue||What Individuals are Impacted?||Is the IRS Correcting These Issues Now?||Next Steps for Taxpayers||Can TAS Help?|
|1||EIP Did Not Include the Qualifying Child Portion||Taxpayers who used the Non-Filer Tool before May 17 and claimed at least one qualifying child, but the EIP payment did not include the qualifying child portion of the EIP.||Yes. The IRS began depositing payments as of August 5th and mailing paper checks or debit cards on August 7th for the additional EIP amount.*||None. The IRS is currently issuing the payments. Unless the individual does not receive the payment by late August, there is no action to take.||Yes. If you have not received your additional EIP by the end of August, you can contact TAS.|
|2||Injured Spouse||The taxpayer is an Injured Spouse with a Form 8379 on file associated with the return used to calculate the EIP, or the taxpayer can fax or mail a completed Form 8379 and had his or her portion of the EIP payment applied to Child Support Obligations.||Yes. The IRS is reissuing the Injured Spouse’s portion of the EIP where that portion of the EIP was erroneously withheld. *||Action May Be Required: If you have filed a Form 8379, there is nothing you need to do, and the IRS will issue the Injured Spouse’s portion of the EIP in the coming weeks. If you are eligible for Injured Spouse relief but have not filed a Form 8379, you should do so to have your portion of the EIP reissued.||Yes. If you have not received your additional EIP by the end of August, you can contact TAS.|
|3||Joint Return With a Decedent or Incarcerated Spouse||The taxpayer returned the EIP payment issued based on a joint return with a deceased or incarcerated spouse (or the payment was stopped) and the taxpayer is eligible to receive his or her portion of the EIP.||Yes. The IRS is reissuing the surviving spouse’s portion of the EIP along with amounts for any qualifying children in the original payment. *||None. The IRS will recalculate the EIP and will be making direct deposits or mailing paper checks in the coming weeks. Unless the individual does not receive the payment by mid-September there is no action to take.||Yes. Once the IRS establishes a date by which it expects this problem to be fixed, TAS can assist taxpayers whose problems have not been resolved by that date.|
|4||Math Error Identified by the IRS||The taxpayer’s EIP was based on a 2018 or 2019 tax return where the IRS identified a Math Error, the Math Error impacted the amount of the EIP, and the Math Error has been or can be resolved.||Yes. The IRS can reissue the missing EIP amount. If the Math Error has been resolved, the IRS should release the EIP payment automatically. If not, the taxpayer will need to work with the IRS or TAS to correct the math error adjustment before the EIP amount is adjusted and paid. *||Action Required: Taxpayer should call the IRS to resolve the Math Error to generate the release or proper amount of EIP.||Yes. TAS can assist in resolving the Math Error, which will trigger payment of the EIP, if the taxpayer meets TAS’ case-acceptance criteria.|
|5||Identity Theft||The taxpayer was the victim of identity theft and either did not receive an EIP or received an incorrect amount.||Yes. If the identity theft problem is resolved, the EIP can be adjusted as part of resolving the identity theft case.||Action Required: Taxpayer should contact the IRS to resolve the identity theft issue.||Yes. TAS can assist in resolving the identity theft issue, which will trigger payment of the EIP, if the taxpayer meets TAS’ case-acceptance criteria.|
|6||No 2018 or 2019 Tax Return Filed and Did Not Receive an Information Return (SSA 1099 or RRB 1099) or SSI or VA Benefits||EIP was not issued because the taxpayer did not file a 2018 or 2019 tax return and did not use the Non-Filer Tool.||Yes. If the taxpayer files a tax return or uses the Non-Filer Tool by 10/15, the IRS will issue the EIP.||Action Required: Taxpayer should file 2018 or 2019 tax return or use the IRS Non-Filer Tool no later than 10/15 to generate the EIP.
Taxpayers who do not act before 10/15 will be able to claim the EIP benefits when they file their 2020 tax returns.
|No. TAS cannot assist with the filing of a tax return. However, if the taxpayer experiences a problem after the return is filed, TAS may be able to assist.|
|7||Amended Return Filed or Processed After the Issuance of the EIP||EIP was based on original filed return. However, the taxpayer later filed an amended return that increased the EIP amount.||No||Action Required: Taxpayer can reconcile the difference on 2020 tax return and receive the additional amount in 2021.||No|
|8||EIP Calculated on Wrong Year||IRS used the most current information it had in its system (as directed by the legislation). In some cases, the EIP was calculated on 2018 tax return and taxpayer wants it calculated on 2019 return (or EIP was calculated on 2019 return and the taxpayer wants it calculated on 2018 return).||No||Action Required: Taxpayer can reconcile the differences on 2020 tax return and receive the additional amount in 2021.||No|
|9||EIP Based on Government-Issued 2019 Information Return (SSA 1099 or RRB 1099) or 2019 SSI or VA Benefits Paid||EIP was based on an information return (SSA 1099 or RRB 1099) or SSI or VA benefits information provided to IRS. After the EIP payment, the taxpayer filed a 2019 tax return or uses the Non-Filer Tool, which increases the EIP amount.||No||Action Required: Taxpayer can reconcile the differences on 2020 tax return and receive the additional amount in 2021.||No|
|10||SSA/RRB, VA or SSI Recipient and Claimed as Dependent on Another Taxpayer’s Return.||Individuals who receive SSA/RRB, VA, or SSI benefits and who were deemed ineligible for the EIP because they were claimed as a dependent on another individual’s 2019 tax return.||No||Action Required: If appropriate, Taxpayer can reconcile on 2020 tax return and receive the additional amount in 2021.||No|
¹This chart was prepared by TAS based on discussions with the IRS and is not an official statement of IRS position. The information reflects TAS’s understanding of the processes as of August 10, 2020.
* Individuals receiving an additional payment should be able to track it by using the “Get My Payment” tool on the IRS website. Recipients should also receive a notice by mail notifying them that the additional $500 EIP per qualifying child was issued. The IRS recommends that recipients keep this notice for their records.
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.
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