Turbotax calculated a refund on my federal return and the IRS drastically changed the amount stating I had made a calculation error. Why?

[Bishopdoug123]

Was it because of the covid recovery program?

[xmasbaby0]

TurboTax does not get any information from the IRS after you file your tax return, so no one at TT knows why your refund was less.

You have not mentioned any specific amounts.  Sometimes we can make an educated guess as to the reason for your reduced refund if you mention specific amounts--for example if your refund was short by $1400 per person---it is likely to be a mix up regarding the 3rd EIP payment.    If you received the 3rd stimulus check of $1400 per person in 2021 then you got letter 6475 from the IRS about it.   You needed to enter the amount you received.   If you already received that money then line 30 on your Form 1040 should have been blank.

  If it is short by $1800 or  $1500 or  a multiple of that amount  ---   maybe a mixup regarding the advance child tax credit payments. If you received monthly child tax credit payments of $250 or $300 per month between July and December of 2021, then you got letter 6419 from the IRS, and you were required to enter the amount of the advance payments.   Only the remaining amount of the CTC should have been on line 28 of your Form 1040.

The IRS knows how much they sent to you for the 3rd stimulus check and they know how much they sent for advance child tax credit payments.   If you answered something incorrectly on your tax return then the IRS made a correction that resulted in a reduced refund for you. 

 Or---the fees you were supposed to pay for using TurboTax + the "refund processing fee" charged by the third party bank….

Did you choose to have TT fees deducted from your Federal refund?  (Remember that if you did that, you also agreed to an extra refund processing fee of $39.99 or $44.99 in CA)

How can I see my TurboTax  fees?   

https://ttlc.intuit.com/questions/2565973-how-do-i-review-my-fees-in-turbotax-online

What is Refund Processing Service?

The IRS will send you a letter that explains why your refund was reduced.   Meanwhile it might help you to check your online IRS account.

https://www.irs.gov/payments/your-online-account

https://blog.turbotax.intuit.com/tax-refunds/why-is-my-tax-refund-not-what-i-expected-49240/

https://www.irs.gov/newsroom/questions-and-answers-about-the-third-round-economic-impact-payment-top...

If you need to trace a payment that the IRS says has been issued to you, mail or fax a completed IRS Form 3911, Taxpayer Statement Regarding Refund.

Updated IRS FAQ about recovery rebate credit

https://www.irs.gov/pub/taxpros/fs-2022-27.pdf

[Bishopdoug123]

The IRS message was not clear to me.  It said I had made a miscalculation.  That was it.  I am now assuming it has to be one of the stimulus checks I received.  Have heard the IRS is impossible to contact so I am letting it go.  Interesting the state didn't find a problem.  IRS said it would submit the smaller refund on June 4th but to date have received nothing.  Probably never will.  

[VolvoGirl]

Was it the letter saying like 5 things it could be?  Did it mention the Recovery Rebate Credit?  How much did they reduce it?

The 2 most common reasons this year is you entered the wrong amount on line 30 for the Recovery Rebate Credit (3rd Stimulus payment) or line 28 for the Child Tax Credit.  Those lines are just if you didn't already get the full amount or qualify for more.  The IRS knows what they already sent you.  

A lot of people answered the questions wrong and tried to claim the credits again.  Double check your bank statements and Check your IRS account (both accounts if married)

Your Online Account | Internal Revenue Service

[NCperson]

@Bishopdoug123 - look at lines 28 and 30 of Form 1040 - the issue is typically there. what is listed on these two lines

What was the EXACT amount of the IRS adjustment? 

Post back the answers and we can figure it out.