Why did the IRS reduce my tax refund after claiming the Recovery Rebate Credit?

The IRS is finally processing tax returns where there was a discrepancy with round 1 and 2 stimulus payments claimed on the return. Considering many taxpayers' refunds have been delayed for 10 weeks or more most are relieved to see that their tax returns are finally being processed, but also are disappointed to find out that their refund is being reduced. In most cases this is due to taxpayers claiming that they did not receive all or a portion of the first and second round of stimulus payments that were issued through 2020 and January of 2021. IRS records may indicate that the payments in question were in fact issued to the taxpayer.

What to do if you disagree with the changes.


If you do not agree with the changes, taxpayers will need to initiate a trace on the stimulus payments the IRS is claiming were paid.


How can you request an IRS trace for missing stimulus money?


To request a payment trace, call the IRS at 800-919-9835 or mail or fax a completed Form 3911, Taxpayer Statement Regarding Refund (PDF). Note: If you call the number, you'll have to listen through the recorded content before you can connect with an agent.

To complete Form 3911 for your third stimulus check, the IRS provides the following instructions:

1. Write "EIP" on the top of the form (EIP stands for Economic Impact Payment.)

2. Complete the form answering all refund questions as they relate to your payment.

3. When completing item 7 under Section 1:

  • Check the box for "Individual" as the Type of return.

  • Enter "2020" as the Tax Period.

  • Do not write anything for the Date Filed.

Sign the form. If you're married and filing together, both spouses must sign the form


What can the IRS do for a missing stimulus check?

The IRS will do the following to process your claim, according to its website:


• If you didn't cash the check, the IRS will issue a replacement. If you discover the original check among your belongings, you're expected to return it as soon as possible.


• If you did cash or deposit the check, expect a claim package from the Bureau of the Fiscal Service, which will include a copy of the cashed check. Follow the included instructions. The bureau will review your claim and the signature on the canceled check before deciding whether it will issue a replacement. This is presumably to guard against stimulus check fraud.


How soon after requesting a payment trace will your stimulus check arrive?

You should get a response from the IRS about six weeks after the agency receives your request for a payment trace, according to its website. But this could be delayed due to limited staffing.


How soon after requesting a payment trace will your stimulus check arrive?

You should get a response from the IRS about six weeks after the agency receives your request for a payment trace, according to its website. But this could be delayed due to limited staffing.

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