What is an IRS ‘math error’ and how does it impact stimulus check payments?

IT'S already been tough enough on American taxpayers who have been waiting an eternity for their tax return – but now they find themselves getting a “math error” notice in the mail from the Internal Revenue Service (IRS).

From January 1 to July 15, the IRS has sent roughly nine million math-error notices, according to the Taxpayer Advocate Service.

That is up significantly from nearly 629,000 registered during the same period in 2020.

The big increase comes as Americans have been receiving stimulus checks for relief from the coronavirus pandemic in the past year.

In fact, of the nine million notices some 7.4million was related to stimulus payments.

What is a math error?

If you received a letter from the IRS, you might be confused and have put your addition and subtraction skills in question.

But sometimes it isn’t always as simple as a mathematical mistake.

The IRS might send you a list of issues that were found wrong including the Social Security number of the claimer was incomplete or missing, a wrong filing status, or the last name not matching the agency’s record.

As a result of the so-called “math error,” the IRS will typically make an adjustment including on the balance due or potentially a smaller refund.

Another big problem is the IRS isn’t sending vital information, according to experts.

“One of the biggest issues we’re having is the reconciliation of stimulus payments,” Dan Herron, a Certified Financial Planner and CPA with Elemental Wealth Advisors, told CNBC.

“The IRS is sending out balance due notices with no calculation or explanation analysis.”

What you need to do if you get the notice

The worst thing you can do if you get a letter from the IRS is do nothing if you aren’t sure.

If you do not respond within 60-days of receiving the notice, the adjustment is final and the IRS can start collections.

Additionally, you’ll lose the right to file a petition in the U.S. Tax Court.  

However, there might be an exception to this, as this process has been a mess. 

More than 5million taxpayers were sent a math error notice this year without the 60-day language being included.

As a result, the IRS resending some letters with clear language, and is restating the time you have to respond.

If you have any concerns about the letter, you could speak and review your account with a representative at (800) 829-8374.

However, know that taxpayers have had a tough time getting a hold of a representative.

During the tax season of 2021, the IRS has received more than 167 million phone calls, but just 9% have connected to a live individual.

So, you may want to try another contact method.

We show you three big changes you need to check out that could impact your finances this week.

Also, check out our live child tax credits blog.