You May Have to Repay Part of Your Stimulus Check: What to Know About Dispute Deadline

Americans who claimed a stimulus check on their tax return may have to pay back some or all of the payment and many are up against the end of a 60-day deadline to dispute the repayment if they believe they were eligible for the money.

Most Americans received stimulus checks in their mail or directly in their bank accounts, but others claimed the Recovery Rebate Credit on their tax return. A unit with the IRS is reviewing all returns that claimed the Recovery Rebate Credit to verify the accuracy of the claims and found "math errors" on more than 7 million returns.

Natalie Bonelli told Boston's WCVB she received a letter from the IRS informing her she had to pay back a $600 stimulus payment she claimed on her return plus just over $3 in interest. She received the first payment of $1,200 but told WCVB she never received the $600 payment because she moved.

The IRS encouraged those who didn't receive the first or second stimulus payment to claim the money on their 2020 tax return, which Bonelli said she did. While she believes she's entitled to the $600 payment, she told WCVB she's struggled to resolve the issue and at the time, hadn't been able to get in touch with someone at the IRS.

stimulus check deadline
Some Americans are being told they have to repay part or all of the money they claimed for stimulus checks on their returns and they only have 60 days to dispute the assessment. In this photo illustration, Twenty and five dollar bills are displayed on August 29, 2017, in San Anselmo, California. Justin Sullivan/Getty Images

Taxpayers have 60 days from the time the IRS sends a math error notice to request an abatement of the assessment, according to the Taxpayer Advocate Service, an office within the IRS. If a person received their letter in August, they're coming up on the 60-day mark to file a request. Once a request is made, the IRS must abate the assessment and reassess the tax.

"Although this authority can be a useful tool for the IRS when used appropriately, it comes with risks for taxpayers, namely, missing the opportunity to dispute the assessment in the U.S. Tax Court if taxpayers do not timely object to the assessment," the Taxpayer Advocate Service wrote in a blog.

After the 60-day time period is up, the Taxpayer Advocate Service noted the math error assessment is "final." The only option available to taxpayers at that point is to pay the tax and file a refund suit in the U.S. District Court or the Court of Federal Claims.

The Taxpayer Advocate Service took issue with the IRS failing to always make it perfectly clear in their letters about what was being adjusted and why and the importance of adhering to the 60-day deadline. This filing season, the Taxpayer Advocate Service said more than 5 million math error notices that omitted language about the abatement deadline were issued.

To ensure people were informed about the deadline, the IRS sent additional notices about their option to dispute the tax and gave them 60 additional days to respond, according to the Taxpayer Advocate Service. To request the assessment be abated, taxpayers can call the IRS at 800-829-0922 and they're encouraged to have additional documentation or information to justify why the assessment should be reversed.