USA TODAY International Edition
Check it out, IRS: You paid us twice
We waited two years for stimulus payment
Just when I thought the IRS had solved a problem that lingered for two years for my wife and me, the overwhelmed agency created another one.
USA TODAY published the tale of our frustrating struggle to get the stimulus payment approved by Congress way back in March 2020. ( We'd moved and closed our old bank account, leading to a failed direct deposit, a check that wasn't forwarded to us and, finally, the IRS rejecting our claim for the Rebate Recovery Credit.)
In what seemed like a surprising and happy ending, my wife reached a human being by phone in April and the stimulus payment was deposited in our bank account.
But wait, there's more.
Overpaid by the IRS
We just got a U. S. Treasury check in the mail. That's right, the IRS paid us twice. Actually, the check was $ 1.66 more than the direct deposit because a bit of interest accrued between the day of the deposit and the check being issued.
As our laughter subsided, I thought of the many ways this could be bad.
“If we thought it was hard to get money from the IRS,” I told my wife, “imagine how hard it's going to be to give it back.” Remembering the rejection of our Rebate Recovery Credit on our 2020 return, I figured that when we file next year, we'll end up being accused of tax fraud.
Of course, it's easy to beat up the IRS. The fact is that the agency is horribly understaffed – and COVID- 19 work conditions and the demands of processing three stimulus payments made that situation worse.
That means taxpayers don't get anything approaching good service. In writing the original piece, which outlined the hours we spent trying to reach a real person to get help, I learned that agency workers were able to answer only 11% of 282 million phone calls received last year.
How do I return money to the IRS?
The good news, I hope, is that the IRS has an established protocol for returning money – which is a little troubling, in that it suggests this happens with some regularity.
Tax topic No. 161, Returning an Erroneous Refund, lays out the steps. I particularly like that it notes to return the check “immediately, but no later than 21 days.”
If only the agency could hold itself to anything approaching that standard.
The guidance says to “give a brief explanation of the reason for returning the refund check.”
Oh, I will.
Recovery Rebate tip
Here's a footnote: If you, like us, didn't initially receive an Economic Impact Payment, then claimed the Rebate Recovery Credit and ran into problems, you can reach out to the Taxpayer Advocate Service, an independent agency within the IRS.
It has a toll- free national number, 877- 777- 4778. One tiny caveat: The service's calls are initially answered by IRS call centers, so taxpayers may have to call a few times to get through.