IRS MOSTLY CORRECT ON REBATE CREDITS

IRS mostly correct on rebate credits. The IRS correctly calculated taxpayers eligibility for a recovery rebate credit in the 2021 filing season 99.3% of the time, the Treasury Inspector General for Tax Administration (TOGTA) reported. However, even the 0.7% error rate involved millions of dollars in improper allowance of the credit, and TIGTA found other instances where individuals should have received a recovery rebate credit or a greater amount of one but didn’t The report “Processing of Recovery Rebate Credit Claims During the 2021 Filing Season” dated in may, analyzed reasons for the errors, which were both systemic and manual, and made 22 recommendations, 12 of which the IRS disagreed with. Some recommendations the Service agreed to were issued as alerts to the Service during TIGTA’s study, some of which resulted in processing changes during the filing season. IRS mostly correct on rebate credits.

Achieving a 99.3% accuracy rate was “no small feat”, Kenneth Corbin, IRS commissioner, Wage and Investment Division said in the memo providing IRS management’s response to the draft report. As TIGTA also noted, 26.3 million tax returns claimed recovery rebate credits for 2020 totaling $39.2 billion. The recovery rebate credit, a provision of the Coronavirus Aid, Relief, and Economic Security Act, provided the refundable credit of up to $1200 per adult and up to $600 per qualifying child, applied to the 2020 tax year. It was established and modified by the Consolidated Appropriations Act in 2021, including an additional recovery rebate credit for 2020 of up to $600 per eligible adult and $600 per child. The IRS will try in the future to bring the numbers better in line with what they want to accomplish.

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