The IRS incorrectly made changes to my tax return that reduced the amount of my refund in the amount of $1,200

[Wingett Photography]

Can TurboTax look into this?

The IRS changed my 2020 tax return (married filing jointly) resulting in a $1,200 reduction of my refund as calculated and verified by TurboTax Home and Business. This is the exact amount of the second COVID relief deposit. My guess is that the person at the IRS who reviewed my return saw that my AGI does exceed the income limit of $75,000 for individuals, but failed to notice that my 1040-SR form was checked "Married filing jointly."  This is an obvious error made by the IRS. 

Background:

I E-filed my taxes on February 2, 2021 using TurboTax Home and Business. The refund recently appeared in my bank account marked "Pending March 10."

The IRS stated under the Details of my return status that the reason for changing my return was one of the following:

• The Social Security number of one or more individuals claimed as a qualifying dependent was missing or incomplete.
• The last name of one or more individuals claimed as a qualifying dependent does not match our records.
• One or more individuals claimed as a qualifying dependent exceeds the age limit.
• Your adjusted gross income exceeds $75,000 ($150,000 if married filing jointly, $112,500 if head of household).
• The amount was computed incorrectly.

[SweetieJean]

You need to find out if that was actually the reason, or rather one of the other ones listed.  Most IRS adjustments are done by computer, which is unlikely to have misread the efiled return data.  Call the number on the letter you received for more details.

And keep in mind that TT is only as good as your data entry, and answers to questions.  A $1200 refund difference also equates to a $10,000 income reduction at the 12% tax bracket.  So also check your data entry for any typos.

[Wingett Photography]

Thank you for your response. I will attempt to contact the IRS first thing tomorrow morning.

Sorry about the duplicate post. I thought my first post was lost when I attempted to change my profile name.

[VolvoGirl]

Did you have 1200 Recovery rebate credit on line 30?  Did you already get it or get it after you filed?  How much Stimulus payments did you get for each round?  How many people are on your return?  Any dependents?  

[Wingett Photography]

Thanks for your reply. I now understand the problem. This was a software bug in TurboTax. It seems that TurboTax developers fixed this bug, unfortunately after I had E-filed my 2020 return. I have used TurboTax to prepare my Home and Business Federal tax returns since 2005 and have never encountered such a significant bug. I am extremely disappointed that TurboTax has not fessed up to this error, even when I reported the issue on TurboTax Community. Following is the background of my situation:

After a month had passed, I finally got my tax refund deposit - pending another two weeks, but is was $1,200 less than the TurboTax meter said I would get. Checking the status of my refund at IRS.gov, under "Details" I learned that they had changed my return: "We changed the amount claimed as Recovery Rebate Credit on your tax return." The IRS listed five bulleted possible reasons, none of which were relevant to my situation. Doing some research, I learned that on the 1040-SR form, if you received the second economic stimulus check, which I did and I followed the, then line 30 Recovery rebate credit should be blank. I used the step-by-step instructions, and for some reason TurboTax checked box 30. I did not manually check it. I made several reviews of my return and all were 100% accurate. Now I going to submit an amended return to correct this error, even though the IRS has already done this, and I will look deep for some other deductions to increase my refund.

[VolvoGirl]

Did you enter the second round $1,200 into your return in the second box?  If you got it in Jan or Feb 2021 you were suppose to enter it on your 2020 return so it wouldn't give it to you again on line 30.   On this screen

[Shellyc123]

Thank you for this information,  the IRS just posted those same explanations to mine after a month and a half waiting for mine as well. Turbo tax needs to let everyone who filed early and encountered this bug, that they may need to file an amended return. I most certainly will.

[Tom A]

Thank you so much for sharing! Same thing happened to me and I had no idea why. I filed on 2/7. Got the status update from IRS today (4/19). My refund was reduced by 38%.

[VolvoGirl]

If the IRS Adjusted your return for the Recovery rebate credit you do not need to amend.  The IRS already adjusted your return.  Amending won't change anything or give you more refund.  

[WDL315PCJ23B]

Yes that is exactly what happened but it was1800 dollars

[VolvoGirl]

If you are Single 1800 would be the total for the first 2 Stimulus payments 1200+600.  Did you already get those?  Then why did it show up on line 30?  You tried to get it again.  The IRS knows they already sent it to you so they took if off your tax return.

[WDL315PCJ23B]

I didn't understand the question but then I think I corrected it but they still took the1800 and when I called they said that they were right and I was wrong and turbo tax says that my taxes were done right gurenteed  so some body owes me1800 dollars right

[VolvoGirl]

Turbo Tax is a self prepared return.  They only guarantee the calculations are right based on your entries.  They won't know if you entered something wrong or twice or in the wrong place or left something out.  It doesn't check against any outside sources. The IRS has copies of all the W2s and 1099s your employer and banks/brokers, etc. sent in to match against. Turbo Tax only checks the calculations of what you entered. It is your responsibility to check it over before you file.

You must have answered a question wrong if you got the wrong amount on line 30.

[batjammin]

This is an ongoing problem apparently, as I received my refund 3 months past the estimated refund date minus the total 3k stimulus that TTax calculated to have been owed(3 children, married filed jointly, income of 93k).  All info they suggested is wrong is indeed correct.   When attempting to contact customer service with the ref# provided you get a recording that states " Due to high call volume about this problem, we are no longer taking calls".  The IRS is fuking taxpayers once again.

[KittyKay]

Hi,

I have the exact same issue you had. I filled my 2021 taxes a little over a month ago. IRS adjusted my refund and I received a lower amount than I had expected after Turbo estimated what I’d get. I got the letter that stated the reasons for the adjustment but non of them applied to me.

so what did you end up doing to receive your recovery rebate credit? I got the other 2 but did not receive the third one. I have tried calling IRS and that’s a pain being on hold for hours. Should I amend my taxes?