Irs denied all my credits

[Josh79]

So i talked to an IRS agent and she stated that for some reason(I'm awaiting a letter and she claimed not to know) that all of my credits....child tax credits, EIC, and education credit, were all denied.

I've filed essentially the same basic return for 10 years.

Why would they deny me these credits? 

I got a "tax topic 151" notice on the IRS2GO app.

[Carl]

Tax Topic 151 means that you're getting a tax offset (less of or no refund), which is where the Department of Treasury will be taking your refund to pay for something that has been reported that you owe.

The most common reasons for getting a tax offset are unpaid taxes, unpaid child support payments, and offsets for federal student loans that are considered in default.

If you received Tax Topic 151 error code, the IRS generally will not help you. They will send you a letter that explains why you won't be getting your refund, or how much of the refund was taken. In that letter will be instructions for you to follow to appeal the actions the IRS has taken. It will also specify a "drop dead" date. If you don't start your appeal action by the drop dead date, then you lose.

So basically, you won't know anything until you get that letter.

[Josh79]

Well I dont owe anyone any money, no back taxes, no child support, no student loans, no garnishments or liens. Nothing like that at all.

The agent specifically said that my EIC and child tax credits were denied for this years return and that I will be getting my refund, less those credits, on april 12th. 

So that is the offset. 

Im wondering why the IRS would deny me those credits, which I've had for 10 years. It makes no sense to me.

[DanielV01]

Just be patient and wait for a letter for now.  They may be taking a closer look, and occasionally the IRS will pull your name from a hat and ask you to submit proof of the credits you are claiming.  But the IRS will never, ever deny any claim without first giving you an opportunity to substantiate it if they do question it.  

With Child Tax Credit and Earned Income Credit, they usually ask for proof that you are claiming qualifying children (either your biological children, your children through marriage, or your grandchildren, brothers/sisters, or nieces/nephews.  Foster children may also qualify).  They also may ask for proof that the children live with you.  This can usually be substantiated through medical or school records, or other legal, official documentation that places the qualifying child in your home.

If you do get a letter and need assistance, you can see Audit Support for assistance at the following link:  What is the TurboTax Audit Support Guarantee?

[Carl]

Unfortunately, you or anyone else can't do jack squat until you get that letter. All you can do is wait. Normally, such letters arrive 3-4 weeks after the offset or denial. But with the covid stuff "and" the last minute change requiring the IRS to not tax the first $10,200 of unemployment, it may be longer.

[Mike9241]

can't be 100% positive but I doubt tax credits would be denied because there is an offset in effect. That doesn't make sense. Nor do I think it would conform to the tax code. 

[Josh79]

Tax topic 151 doesnt necessarily mean there is an offset. It's a notice of right to appeal an IRS adjustment to a tax filing.

In my case the IRS adjusted my return by denying my credits.

Oh, my tax return actually dropped a couple days ago, though it was 110 dollars, so small I didnt even notice the credit to my account. It's a far cry from the 10k I am supposed to get.

I guess for now I shall await the letter.

[Carl]

Tax topic 151 doesnt necessarily mean there is an offset.

Heck, it could be something as simple as income you forgot to import, that the IRS became aware of. I seen/heard about that often enough.

I've also seen it where folks got mixed up entering a W-2 and swapped amounts around among boxes 2, 4 and 6. Of course, the IRS pretty much catches that rather quickly.

[SweetieJean]

Another reason might be that someone else claimed the same dependent as you, so all credits were suspended while they investigate.

[DanielV01 · Accepted solution]

@Josh79  The fact that they only sent you what you would have received filing as single without dependents does not mean that the situation is over for you.  You will get a chance to appeal, so gather the information I suggest in my prior post.  And, again, if you filed through TurboTax, then the Audit Support team can help you to organize your documents at a minimum.

And if your return was accepted via e-file, it's difficult to imagine that someone else got their claim in, because they would not have been able to e-file the same dependents and the IRS is taking forever right now to process paper-filed (mailed-in) returns.  It's far more likely that they are simply questioning the dependents, period, and want to see proof before issuing a refund.  They will explain either way.  And if you prove you are entitled to receive the refund then they will issue it.  And they will pay you interest as well.