A Math Error Could Be Behind Your Tax Refund Delay

The year 2020 is going to go down in the history books for a lot of reasons, and one of them is the enormous increase in the number of math errors that taxpayers made on their tax returns. The result has been unfortunate delays in refund checks being mailed out. If you filed on time and are still waiting for your money, there’s a good chance that you’ve fallen into this same category.

According to an update released by the Taxpayer Advocate Service, the changes introduced by the Recovery Rebate Credit and Child Tax Credit have complicated the tax forms so significantly that there have been nearly three million more error corrections required in the first half of 2021 than in the same period of the previous year. The independent office of the IRS said that while there were 628,997 corrections made in 2020, at the same point this year there over 9 million corrections were required. After finding so many errors the agency opted to review many refunds manually, and that is slowing the process down.

Though the explanation makes sense, it is no help to the millions of Americans who filed on time – or as early as February – in hopes of getting their hands on the refunds they were owed.

The IRS understands and is working overtime to overcome the enormous number of returns that remain unprocessed, but there have already been 7.4 million that have required processing through the “Error Resolution System.” This means that once a mistake has been found it needs to be more closely reviewed. Though this slows things down, it also serves as a catalyst for a letter to be sent, notifying you of a math error.

Unfortunately, this notice contains little in the way of substantive information. Many times, taxpayers will find themselves confounded by the lack of detail found in the letters, which are sent out as either a Notice CP11 (for Computer Paragraph 11, indicating that a correction has been made and the taxpayer owes taxes) or Notice CP12 (for Computer Paragraph 12, indicating that a correction was made to the amount of refund that the taxpayer is owed).

In its report on the math error delays, the TAS writes, “Many math error notices are vague and do not adequately explain the urgency the situation demands. In fact, in some instances, math error notices don’t even specify the exact error that was corrected, but rather provide a series of possible errors that may have been addressed by the IRS through its math error authority.”

The stress of the situation for taxpayers is compounded by the short window in which corrections can be disputed. Once a change has been made taxpayers must file a dispute within 60 days, and to do so they must pay close attention to the instructions contained within the letter they received in order to file their correction properly.