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Economic Impact Payments


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How are other tax preparers handling taxpayers who state they did not receive their economic impact payments in 2020 and early part of 2021?  Are you inputting zero economic impact payments received; therefore creating a credit on tax return?  Or are you asking taxpayers to set up account with IRS to confirm they did not receive their payments before inputting info on tax return?  I have a client that adamantly states he did not receive the first stimulus payment, but received the second stimulus payment in full.  Payments would have not been directly deposited because taxpayer has never provided banking info to taxing agencies.  I would think that if taxpayer received second payment in full, he would have also received first payment, but he is telling us that he did not receive.  He also is not too big on using computers so he does not want to set up an account.  Just checking to see how others are handling.  It amazes me how many people don’t remember receiving or how much they received……that means their economic situation was not dire…..when you are in a situation where every penny counts; you know how many pennies you received!

Peggy Sioux

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I had client that did not receive EIP 1 because of income on 2018 return.  Once 2019 was filed he received full EIP 2.  I am also amazed at how many don't know how much they received.  Must be the accountant in me. 

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Peggy's client might've gotten a debit card -- and maybe tossed it. They'll say we did something wrong when their refund is held up or when it's smaller than they expected or they receive a bill for balance due.

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I ask them to check again, I look at when 2019 was filed, AGI, and 2018 AGI to see if maybe they were or were not eligible, explain to them they should have gotten it (or not).  In the end, I go with what the client says.  A lot of them bring in the statement (letter) from the 2nd but don't have the letter from the first one.

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I've been amazed also at the people who can't remember.  But I nag them a few times to check their bank records, and if they still maintain they didn't get it, or didn't get the max, I put it on the return that way and just warn them that if they're wrong, it will hold up their refund while the IRS gets the correct amount.

Now I see the IRS is planning to send out letters, so cue a wave of calls.....

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The IRS will check and adjust Recovery Rebate, so I'm not spending any time chasing the amounts down from clients. If they're in the phaseout range, I'll call them, but if they're below or above the phaseout range, I make entries accordingly.

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I'm following Abby's method.  Some that were in the phaseout range called during 2020 when they received the reduced payment, so that information was saved in their file at that time. 

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I make people get their transcripts if they don't know or have confidence in their info.

It is very easy to go on Get My Transcript and request them to be mailed. I do that in my office and tell the clients to get them to me when they receive them in the mail.

Of course this is not 100% fool proof, but it has prevented a host of problems.

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I worked up a short question sheet re EIP's, foreign bank accts, Virtual currency and  some state issues.

It was sent as an email attachment.  I prefaced it in the email by saying that these were questions that the IRS required to be answered and would they please circle the Yes or No and to please sign and date it.  

It worked perfectly.  Now I have a written record in their file, so if they have reported the wrong EIP, there will be no argument.

 

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I've asked my clients to recheck.  To go through their bank statements again and also try to jog their memory.  That's as far as I take it.  If they say, they didn't receive it a zero goes on the line and I document my inquiry accordingly. 

I'll also mention, I have two older clients who want nothing to do with direct deposit.  Every year it's the same thing...paper checks.  Well, both had their stimulus payments direct deposited into their accounts for stimulus #3.  They swear they've never provided banking information to the IRS.  

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I set up a question on my tax organizer that asks how much they got for EIP1 in April/May of 2020 & EIP2 in Dec2020/Jan 2021. 

Having the dates there as a reference seemed to help most remember to go back and check their bank statements for the amounts. 

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On 4/10/2021 at 10:39 AM, Lion EA said:

Max, would you share your email attachment? Just let me know how, if you want an email from me so you just hit Reply and attach or... I still love you if you don't share!

No problem. What is your mail address?

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I use an organizer for those of my clients I think will fill it out, or al least use it to help them remember what to bring.  But for the vast majority of my clients, I also use a one to two page form.  First page is for everyone, second page just has them list children and/or estimated tax payments.  Just in case you are interested, I have attached the word file.

Questionairre for Drop Offs mailed 1-9-21.docx

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I have them write down and initial what amount they received.  The statement they are initialing says if they told me the wrong amount, and it involves correspondence or phone calls on my part there will be an additional charge for those services.  It hopefully eliminates some of the discrepancies.  

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Next season how many will remember the 2021 EIP they received nearly a year ago?  Those with children will start receiving some CTC as an advance sometime this summer.  My understanding is that those payments will have to be repaid if income or the child's status change, so they will HAVE to know how much they got.  If we think this season is unbearable....

Our two-page client questionnaire includes blanks for both 2020 EIPs.  Some fill them in, a few even include the IRS letters, some ignore it, and some put in amounts you know are wrong.  I either connect with them or put in the right amount.  I've had very few who actually didn't receive anything, mostly clients where one spouse had died.  Then there are those whose income went down and are entitled to the recovery credit but don't know how much they already received.... Why didn't the IRS website give amounts instead of the fact that a payment was made?  And why did they take it down for 2020 before filing season was over? I hate this tax season!

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