Taxpayers have been confused by letters recently sent out by the IRS, thinking they’re a scam. The letters are legit, however, and worth keeping, as they could help you get money related to the recovery rebate tax credit claimed in your 2020 tax return.
What are these IRS letters exactly?
They’re related to 2020 stimulus payments. For most people, the rebate was already paid out through the first two COVD-relief stimulus checks, but you’re also able to claim these funds when filing your 2020 taxes (for more on how to qualify, click here).
The first batch of letters (CP 11, CP 12 , or CP 13) explains that the IRS has processed the recipient’s 2020 tax return and found errors (income, status of dependents) that have changed the calculations for their recovery rebate. This means you could be owed more money, owe nothing, or even owe money on your taxes (although in this case, this has to do with your tax return in general, not your recovery rebate).
However, the IRS forgot to include information about how to appeal these decisions, as the agency is legally obligated to do. For that reason, the IRS hastily sent out a second follow-up letter, the 6470, which provides more information about the appeal process along with the contact information needed to do so. The letter starts off with “We previously sent you a notice stating we changed the amount claimed as a Recovery Rebate (RRC) on your 2020 tax return…” and, again, all of this is legit.
What are you supposed to do with these letters?
The IRS makes mistakes all the time, so you’ll want to make sure that their calculations are correct. Having done that, if you still believe you’re entitled to the credit, you have to appeal within 60 days of receiving the letter with proof of your eligibility relating to dependents and income.
If you have no reason to appeal, you don’t have to do anything, as the adjustment will be considered official after 60 days. At that point, the IRS can begin the collection process if you owe them money.