refunds received

Technical topics regarding tax preparation.
#1
PHall  
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3rd client in 2 days received refund from IRS and did not know why. I think it may have something to do with unemployment. All three had received unemployment. However, I had already subtracted out the $10200 exclusion when I file the return. Anyone know what is going on?
 

#2
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ACTC?
 

#3
PHall  
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No children in any of the families.
 

#4
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IRS is processing adjustments for unemployment and I've had several clients receive them. When you say you subtracted the exclusion on the return, did you do it before IRS issued the guidance and the new worksheet for calculating the exclusion? If so that could be the issue.

Personally, once I learned about the unemployment exclusion I entered a negative adjustment to account for it but did not file the return that way. Once the update was issued three weeks later with the new worksheet I took my placeholder adjustment out and filed the return that way. If you filed the returns during that three week period with an unemployment exclusion reported in a manner other than the worksheet designed by the IRS I would think that would cause a problem like this.
 

#5
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I had a client finally receive his refund check recently from a 2019 amended return we filed in December.
 

#6
ShawnE  
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I am seeing that. And trying to drill down on it. Small amount could simply be interest added to the check. Theoretically, they should see a letter detailing the changes to the tax return... but when is a question
 

#7
DavidG  
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Maybe it has something to do with the IRS updating its "FAQ" in regards to the 10,200 exclusion and applicability in community property states.

PHall wrote:3rd client in 2 days received refund from IRS and did not know why. I think it may have something to do with unemployment. All three had received unemployment. However, I had already subtracted out the $10200 exclusion when I file the return. Anyone know what is going on?
 

#8
TaxCut  
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Just got one of these today.

The client had unemployment and we excluded the amount. He still owed $421. He received a $4,500 refund plus interest. Doesn't make sense. It's not stimulus either. Strange.
 

#9
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Possibly a stimulus payment based on latest filed return? If they were not originally eligible for third stimulus based on 2019 numbers, then filed 2020 return with lower income, that could trigger the third stimulus payment. Just a thought.
 

#10
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I've had a similar situation with a client receiving a several thousand dollar "refund", but we have no idea what for. Neither he nor his wife received unemployment compensation. He did have to pay back subsidized health insurance payments, but that was in 2019 and the repayment was nowhere near the amount of refund.

He's called the IRS a couple of times and just gets bounced between departments.
 

#11
skassel  
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I have seen the same thing. Get an account transcript. Even if money is owed, if the taxpayer hasn't claimed the stimulus payment, it will be sent to the taxpayer. I don't call it a refund, because it isn't.
Steve Kassel, EA
 


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