The IRS is sending letters to Americans demanding that they pay back all, or parts of their stimulus payments from the American Rescue Plan or CARES Act.
The letters have been going out over the last 3-4 weeks, as people in different states report getting letters from the IRS indicating that they pay back $600, $1,400, or $1,200 – depending on what they reported in their 2020 tax returns.
One such recipient was Natalie Bonelli, a Massachusetts resident, who says the IRS sent her a letter demanding $600 payment plus $3.12 interest. “I panicked,” she told WCVB. “Obviously, I don’t agree with it, and I can’t find anyone to help me actually do something about it.”
She tried contacting the IRS, but received no answer on what was happening. Turns out – a $600 stimulus check was mailed to an address in New York City in her name. She had moved, and the IRS indicated that Bonelli should claim the missing check on her 2020 tax return.
She did that, and now months later – the IRS came after the money. “Now I have to give back money I never got, so it’s a little bit frustrating,” she added. The IRS says they can trace payments to avoid that confusion. The problem is that the process isn’t nearly as simple as the IRS indicates.
It requires a string of phone calls to a number of different branches within the IRS. And the letter that she received only gave her three weeks to render payment.
Experts say the best course of action is to pay what the IRS says you owe- then request a trace and dispute whatever findings they generate, if inaccurate.