Overview
The IRS began sending out a letter containing critical information regarding the Child Tax Credit in late December 2021. As filers began to receive Letter 6419 , taxpayers have been reporting getting incorrect information on the amount they’ve received. Due to this, the IRS is now investigating these reports from taxpayers who claimed the advanced payments in monthly installments from July to December.
Receiving incorrect information on letter 6419 can have serious implications for some taxpayers’ finances if not handled properly. This is because at least half of the Child Tax Credit will be paid out as a lump sum when filing a 2021 return, which could become a lesser amount as a result of the incorrect information. It is important that the Child Tax Credit payments be reconciled because the information on this letter may determine how much money parents will receive when filing.
IRS Commissioner Chuck Rettig stated that he is confident that the number of filers receiving incorrect information on Letter 6419 is low, but it is important to take the necessary precautions to avoid any further issues with the IRS.
Importance of Letter 6419
Taxpayers should be aware of the significance of Letter 6419 as it will detail a lot of information needed by accountants to perform proper calculations on the Child Tax Credit. With this being said, Letter 6419 should be submitted to accountants as early as possible. The earlier the information is received, the more time there is to reconcile errors made by the IRS.
IRS officials are also stressing that people submit their information as accurately as possible in order to streamline the filing process. In doing so The IRS is now also directing filers to a new website that was rolled out ,which allows people to research how much they should have received, compared to how much they actually received. Submitting information on the Child Tax Credit payments early, along with your other information is a great way to avoid becoming another statistic of the IRS backlog.
Wrap-Up
Being placed on the IRS backlog is not an ideal situation, especially with its immense current numbers which are 10x greater than in 2019, before the pandemic. The IRS has also warned of staff shortages and longer wait times than previous years. Submitting information as early as possible to your accountant is a very smart way to avoid unnecessary IRS headaches this tax season.