OT: IRS Overpayment

[Jeffreauxdawg]

Okay. So I sold my business in 2020 and had prepaid for all of my tax filing costs with the bookkeeping firm. Because of some moves and just not wanting to deal with everything, I filed an extension and got around to completing everything this month. I don't want to have to deal with trying to find out from the accounting service what's going on, because they kinda suck and take forever. I know some of you are experts.

After all said and done, I was pretty accurate on my quarterlies and we overpaid by $2186. So that was supposed to be the refund. CPA for the bookkeeper prepared everything and that was what we submitted electronically. The electronic acceptance letter from the IRS on August 10 verified that exact amount.

Well today I just had $4916 deposited into my account. It's exactly $2730 more than we are supposed to get. It shouldn't be stimulus or child tax credit as we are not eligible (sorry Fishwater, the Clampers can also be in the country club.)

So we why would we get an extra $1365 per taxpayer or $2730 above our actual refund? It feels like some kind of mistake. Or is there some kind of credit everyone is getting regardless of income?

 

[Shmuley]

It's a trap.

 

[stateu1]

Okay. So I sold my business in 2020 and had prepaid for all of my tax filing costs with the bookkeeping firm. Because of some moves and just not wanting to deal with everything, I filed an extension and got around to completing everything this month. I don't want to have to deal with trying to find out from the accounting service what's going on, because they kinda suck and take forever. I know some of you are experts.

After all said and done, I was pretty accurate on my quarterlies and we overpaid by $2186. So that was supposed to be the refund. CPA for the bookkeeper prepared everything and that was what we submitted electronically. The electronic acceptance letter from the IRS on August 10 verified that exact amount.

Well today I just had $4916 deposited into my account. It's exactly $2730 more than we are supposed to get. It shouldn't be stimulus or child tax credit as we are not eligible (sorry Fishwater, the Clampers can also be in the country club.)

So we why would we get an extra $1365 per taxpayer or $2730 above our actual refund? It feels like some kind of mistake. Or is there some kind of credit everyone is getting regardless of income?

CPA here. I'd really need more info, but at first glance, I'd say it is stimulus. Was your income down in 2020 from 2019? If you did not get the stimulus payments because 2019 income was too high, but income decreased in 2020, the IRS will give you what was due with the 2020 filing.

 

[PineGroveBully]

That’s what I was thinking as well but you worded it much better than I could have. Was going to ask if he might have taken a loss on it which could have made him eligible.

 

[Jeffreauxdawg]

2019 Income was too high and 2020 was even higher because of a lot of short term cap gains, so if it is stimulus, it's an error. We filed jointly and the one thing I thought it might be is a partial phaseout of the child tax credit on our 2 children (7 and 3.) If you take cap gains out of the mix, we would land right around the phaseouts of the child tax credit... but I have no idea why you would take out the cap gains.

I guess the more important question is, if it is an error overpayment from the IRS is it my responsibility to correct it or do I wait for the them to send me something and then pay it back. Any potential penalties?

 

[patdog]

My rule of thumb for unexpected refunds is don't ask questions. If the IRS made mistake (which the way things are there the last year or so, nothing would surprise me), let them figure it out, if they ever do.

 

[dorndawg]

God made a statement and here you are asking questions.

 

[PineGroveBully]

https://www.irs.gov/taxtopics/tc152
[h=2]Not Entitled to Refund Received[/h][FONT=&quot]If you receive a refund to which you're not entitled, or for an amount that's more than you expected, don't cash the check. For a direct deposit that was greater than expected, immediately contact the IRS at 800-829-1040and your bank or financial institution. If you receive a notice from the IRS explaining an adjustment to a refund amount, you should do as instructed in the notice. For information about returning an erroneous refund, see Topic No. 161.[/FONT]

 

[ronpolk]

Okay. So I sold my business in 2020 and had prepaid for all of my tax filing costs with the bookkeeping firm. Because of some moves and just not wanting to deal with everything, I filed an extension and got around to completing everything this month. I don't want to have to deal with trying to find out from the accounting service what's going on, because they kinda suck and take forever. I know some of you are experts.

After all said and done, I was pretty accurate on my quarterlies and we overpaid by $2186. So that was supposed to be the refund. CPA for the bookkeeper prepared everything and that was what we submitted electronically. The electronic acceptance letter from the IRS on August 10 verified that exact amount.

Well today I just had $4916 deposited into my account. It's exactly $2730 more than we are supposed to get. It shouldn't be stimulus or child tax credit as we are not eligible (sorry Fishwater, the Clampers can also be in the country club.)

So we why would we get an extra $1365 per taxpayer or $2730 above our actual refund? It feels like some kind of mistake. Or is there some kind of credit everyone is getting regardless of income?

Sounds like you got the stimulus… Maybe you’re not as rich as you think you are**

Just kidding with you. I actually had this happen a couple years ago. I reached out to the IRS and they researched it for about 8 months and asked me to send the money back. I didn’t pay any penalties.

 

[Jeffreauxdawg]

This is why you bring important **** to SPS. I would still be on hold and getting squeezed for cash if I called the accountant.

A kind poster sent me a link to set up and IRS tax record account that let me view all of my records online. I never knew this existed, I have had a direct pay account for years, but that is only good for making payments. This let's you review everything. http://ttps://www.irs.gov/payments/view-your-tax-account
Only took 5 minutes to review.

Looks like I am in good standing.

View attachment 21532

They show me as stimmy ineligible for 2020 and 2021 is I knew.
View attachment 21533
View attachment 21534

And as I suspected, no child tax credit either.

View attachment 21535

Appears to be a fat finger event. I appreciate all the advice. I am going with the Patdog and Dorndawg philosophy for now. I'm a 17ing outlaw at heart. PGB, gonna need you to delete your post... In return I won't be calling you or Shmuley to bail me out since you have both warned me...

I see it as karma for the free Koozie's I am sending out over the next few weeks.

 

[Jeffreauxdawg]

I just called. Nobody answered. They must not want it back.

 

[PineGroveBully]

Fish says what is this refund of which you speak.

 

[stateu1]

Even though it shows zero balance, I would still want to know why the discrepancy. I'd call the CPA.

 

[dorndawg]

Sometimes I also cannot believe this website is free.

 

[dawgstudent]

I just called. Nobody answered. They must not want it back.

If you call my number, I'll answer and take it. 662-323-7272

 

[Hellsyeah]

If you call my number, I'll answer and take it. 662-323-7272

This number seems eerily familiar...

 

[Jeffreauxdawg]

I gave it out all the time after hooking up with fat girls in college, figured it would be a nice consolation once the realized I ghosted em... Honestly, they probably ended up happier.

 

[dog12]

My rule of thumb for unexpected refunds is don't ask questions. If the IRS made mistake (which the way things are there the last year or so, nothing would surprise me), let them figure it out, if they ever do.

This is my policy too (i.e., assume the IRS knows what they are doing, especially when you receive a bigger return than you were expecting).

Do NOT, under any circumstances, contact the IRS and tell them that you think they made a mistake.

You might think the "right thing" to do is contact the IRS and let them know that you think they made an error. Forget about that. No good deed goes unpunished . . . especially when you are dealing with a large bureaucratic entity like the IRS.

 

[Jeffreauxdawg]

I have spent all morning ducking and diving through prompts, nothing automated was close to the we overpaid you issue I am facing. So finally I found a prompt for talking to a live human. It immediately said "We are experiencing too many calls at this time, please try again tomorrow, goodbye."

I have tried. Now I am going to send them an envelope with my nothing but my official business card (see below.)

View attachment 21536

 

[TaleofTwoDogs]

The key to reading IRS publications or statements is to read the small print. Your account statement states that your account is in an either/or position (translation - the IRS right hand doesn't know what the left is doing). Look at your account report a month or two from now and it might well change with the additional $2.7K showing up under the ARPA section.

For now, you should contact your CPA in writing to disclose the refund discrepancy. If he doesn't have the answer, he should submit a work ticket with client support of the tax prep software company to determine the nature of the refund. If it was an IRS error, it would be good that you were proactive in your actions to solve the issue.

Or, you can rely on SPS and take your chances. Your choice.

 

[Shmuley]

867-9305

 

[Jeffreauxdawg]

Yeah, I am just going to wait a few months to see if I get a letter. Just as you said, the fine print to Topic No. 161 PGB posted has the real answer to the issue:

https://www.irs.gov/taxtopics/tc161

[FONT=&quot]When the amount of the refund (paper check or direct deposit) is different than what was expected, indicating the IRS changed the amount, a notice explaining the adjustment is mailed to your address of record. Please review the information in the notice to determine if the change to the refund is correct. A toll-free telephone number is included on the notice in case you require further assistance.

[/FONT][FONT=&quot]I read that page as you send it back if you weren't supposed to get it. If we sent you a different amount, wait to get a letter from us explaining why.

We had a mess of a tax return this year (selling a business, a house less than 2 years old, stocks, stock options, oil and gas royalties) it highly possible the IRS caught something in my favor.*** [/FONT]

 

[patdog]

It's only $2,300. Just call the CPA and have him/her look into it to see if you can fairly easily determine what it is. If not, don't worry about it. Worst case you have to pay it back plus a few dollars of penalty and interest, but that won't be much at all on $2,300. If you make it a major case, you'll burn through the money in fees and still may not know what it is.

 

[Jeffreauxdawg]

I was at a party 10+ years ago in Portland with a guy I worked with out there. Tommy Tutone had broken out a guitar and started playing stuff. He's this regular dude now.

 

[stateu1]

It's only $2,300. Just call the CPA and have him/her look into it to see if you can fairly easily determine what it is. If not, don't worry about it. Worst case you have to pay it back plus a few dollars of penalty and interest, but that won't be much at all on $2,300. If you make it a major case, you'll burn through the money in fees and still may not know what it is.

Right and should only be interest. This is not a penalty situation.

 

[Jeffreauxdawg]

Sweet. As of yesterday, the Fed funds rate is .06%... Add in the 3% and I am looking at $83 in interest a year.

Thanks to all. Penalties were my only real concern. FYI. I sent the email to the CPA before this thread. Crickets so far

 

[TNT.sixpack]

I didn't qualify for stimulus money either, yet i got a stimulus payment every time the IRS processed one. For the max amount each time.

 

[Jeffreauxdawg]

Update. Just got a letter from the IRS. Sons of bitches found an error my accountant made and fixed it. Sent a detailed letter (CP24) explaining the error. I am going to buy some lottery tickets, cause I must be the luckiest 17er on the planet.

So if you ever end up getting an extra amount added or removed from your refund, the correct course of action is to give the IRS a few weeks to send you an explanation. Some of the information on the IRS website says to have your bank wire the entire amount back immediately, but that is only if you get a refund that you were not expecting in any amount, if the amount is changed, a letter should always follow apparently.

FYI. My accountant never did respond to my email or voicemail. I now have a new CPA.

 

[SyonaraStanz]

Nevermind