IRS math error notices: Here's what to do if you get an IRS 'Math Error' letter

Millions of Americans are finding they owe the Internal Revenue Service more than they thought for their 2020 taxes. The tax agency has sent out some 11 million “math error” notifications to taxpayers, more than five times as many as they sent in 2019 and more than 14 times as many as last year.

The adjustments generally demand more money or reduce refunds—and, if you owe, they give you only a few weeks to pay it without facing penalty and interest charges.

If you’re one of the sizable number of Americans who has (or will) receive this letter, you’ve probably got a few questions. And the IRS doesn’t make answers easy to find. Here’s what’s going on:

Is a math error letter an audit?

Not exactly. The IRS isn’t asking to review or examine your financial information for your filing. It’s saying that the calculations you made when paying your taxes were incorrect and you (generally) owe more than you paid or are due a smaller refund.

Why do I owe more in taxes?

There are a number of possible reasons, from a math error on your (or your accountant’s) part, to a missing or incomplete Social Security number to the last name of a claimed dependent not matching IRS records.

The best bet this year, though, is you’re getting the letter because of the economic stimulus payments. If your gross adjusted income exceeds $75,000 (or $150,000 if you’re married and filing jointly, or $112,500 if head of household), then you might have to pay some of that stimulus check back.

Can I appeal a math error letter?

You can, but the IRS doesn’t make it easy. People who disagree with the amount are encouraged to call the IRS at (800) 829-8374 to review their account with a representative.

You have 60 days to request an abatement for the amount owed. In that time, you can provide additional documentation to the IRS to explain why you shouldn’t have to pay. However, the IRS notes, “if you don’t provide us additional information that justifies the reversal and we believe the reversal is in error, we may forward your case for audit.”

If you don’t contact the IRS within 60 days, however, you lose all rights to reverse the charges and cannot appeal it, though you can claim a refund after it’s paid.

What happens if I can’t raise the amount I owe by the IRS deadline?

Taxpayers can work out an installment payment schedule or an “offer in compromise” (a settlement that is less than the full amount). You can also ask to be placed in “currently not collectible status,” meaning your financial situation makes it impossible to pay now and the IRS won’t hassle you. Be aware, though, that interest and penalties will still be assessed, and the IRS can attempt to collect those for up to 10 years from the date they were assessed.

My math error letter doesn’t mention a 60-day time period? Am I not eligible?

Over 5 million letters went out this year without language about the 60-day time period. This was an error, and the IRS is resending those math error notices with the proper language, and the clock is being reset on those accounts.

Is this a one-time thing?

Stimulus payments were a part of 2021, so don’t be surprised if you see another note from the IRS next year. In addition, the child tax credit could further complicate things.