This happens every time there's a new form. Taxpayers and tax preparers make an innocent mistake and the tax return gets sent to the IRS' Error Resolution System, or ERS.
ERS is a computer program used to correct errors and inconsistencies detected by the IRS computer system during processing of tax return information. It's automatic when there are such things as omissions of data the IRS needs to substantiate an item on a return. In the most simple application, the program is looking to make sure that taxpayer info is entered where it should be on a form, either by the filer, his or her tax professional or in some cases when data is input by the IRS.
Once in ERS, return processing gets delayed. And when you're waiting for a refund, that means that money you're expecting back from the IRS is delayed, too.
We're just a month into the 2010 filing season and I'm hearing from some folks that ERS is becoming the home for some Schedule M filings, pushing back processing of the associated tax returns by two to three weeks.
Schedule M is the new form that taxpayers must file to account for the Making Work Pay credit. It's also used by retirees who got a $250 stimulus check last year.
This initial problem apparently is in connection with the retiree payments. On lines 10 and 11, where you're asked to answer "yes" or "no" regarding receipt of those checks, some filers are not following the form's instructions.
For example, if you answer "no" on either line, then don't put any dollar amount on the corresponding line. That's sends the IRS a mixed message that will get your filing automatically kicked to ERS.
And when you do check "yes," make sure you enter the correct amount you received.
Questions about amounts: If you, or a client if you're a tax preparer, doesn't remember whether he or she got the payment, it's relatively easy to double check the payment source.
These checks were sent to retirees by either the Social Security Administration, the Railroad Retirement Board or the Veterans Administration.
Inquiries to the Social Security Administration can be made by calling the agency toll-free at 1-800-772-1213. The SSA also has a general economic recovery payment Web site.Veterans Administration questions about stimulus payments can be made toll-free at 1-800-827-1000. The VA also has a general economic recovery payment Web site.
And if your $250 was issued by the Railroad Retirement Board, check out that agency's Web site for more details.
Once you call the appropriate agency, if you discover that there is a discrepancy in the amount you received, the agency then must provide you with a letter confirming the difference.
The bottom line: Read the directions carefully and follow them. If you use tax software, that should help.
And while lines 10 and 11 are the main sticking points right now, there's plenty of room for other errors, especially on a new form.
Schedule M has 14 lines. That's 14 places for mistakes.Related posts:
- Schedule M, yet another new form
- Retiree $250 stimulus checks on the way
- Claiming the Making Work Pay credit (Bankrate.com)
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