Pronto Tax School

IRS “math error” letters increased by 1,331% this year versus last year.

No, that 1,331% increase is not one of my infamous typos!  🙂 

Statistics here from IRS Taxpayer Advocate Service report, check my math please: 

  • 629,000 math error letters sent January 1, 2020 – July 15, 2020.
  • 9 million math error letters sent January 1, 2021 – July 15, 2021.

7.4 million of those letters were related to the notorious “Stimmy Stacks,” i.e. clients not remembering what they did or didn’t receive for stimulus, then IRS sends a letter adjusting the amount reported.

Let’s realize NOW that we will see something similar happen with these Advanced Child Tax Credit Payments.  

With all due respect, if you are not building this new reality of massive levels of “after work” into your tax prep pricing, you are operating in the stone age of tax preparation and it’s time to BE FAIR TO YOURSELF and enter the 21st Century!

The good news is that you can start adjusting (or continue adjusting) TODAY by identifying tax preparation jobs that are most likely to create “after work”–and increasing the price accordingly, or otherwise “account for” this reality.

  • Price was $180 last year?
  • Now it’s $280 and you want to know why?

Dear Client, totally understand what you mean, and here’s why:

“The IRS has greatly increased its sending of letters, and this price is what allows me to help you respond to any potential IRS letters at no additional cost to you.  This way, you know you’re protected not only today, but if you ever get a letter and need my help.”

Of course if you don’t actually support your clients year round, might not want to promise to do so, but I guess that’s a different story…most tax pros in our network DO back up our work and that’s most certainly what we recommend.

If you like updates like this one that aim to give you not just “information” but INSIGHT you can use TODAY to deliver more value for clients and a better tax career for you, we’ve got plenty more where this comes in our Pronto Tax School Update & Refresher courses.   

We have update / refresher packages available for all major credentials, so that you can choose the package that applies to your credential:

In closing on a good note, one of our Pronto Forever Edition Members responded to our news about these “Math” error letters with his recent personal experience;

Andy, I have seen 11 “Math” error letters in the last three weeks. Guess what, all 12 were errors, IRS errors.- 5 were payments made by spouse on a joint return tax return.  IRS software failed to post it against the joint account, showing an amount due taxpayer on the spouse account which the joint account had taxes due.- 4 were RRC where IRS used 2019 income instead of 2020 income to calculate the RRC.- 2 Where IRS failed to note that Texas had until June 15th to file.

All were resolved by IRS after calling them (at a substantial cost of time, waiting for IRS to answer then to research and fix).  Bottom line, IRS is overly stretched and are creating a lot of their own issues.

~Charles Garcia

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IRS “math error” letters increased by 1,331% this year versus last year.