Oops! IRS Letter to Taxpayers Contains Misinformation

The IRS has issued a news release indicating that 286,000 letters were sent to people who claimed the Earned Income Tax Credit on their 1999 tax returns raising questions about whether these people were entitled to claim the credit.

The letter contained some misinformation about where taxpayers should call to resolve child custody issues. The letter mistakenly directed taxpayers to contact state revenue agencies. Instead, taxpayers with questions about the Earned Income Tax Credit should contact the IRS at 1-800-829-1040.

The reason for the letter was to ask taxpayers to review the rules for the Earned Income Tax Credit to make sure they had correctly claimed the credit. In particular, the IRS wants to point out to these people that any child who makes a taxpayer eligible to claim the Earned Income Tax Credit must have lived with the taxpayer for more than six months during 1999.

Taxpayers who claimed the EITC in error are encouraged to amend their tax returns and remove the credit claim.

All recipients of the original letter should expect a new letter soon, reiterating the IRS concerns and providing the correct telephone number for contacting the IRS.

You may like these other stories...

Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...
IRS chief: New rule on the way for tax-exempt groupsIRS Commissioner John Koskinen told the USA Today on Monday that the agency will likely rewrite a proposed rule regulating the political activities of nonprofit groups to...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.