The Internal Revenue Service Math and Taxpayer Help Act (IRS MATH Act) reforms the IRS’s implementation of its so-called “math error” authority to adjust tax returns.
Math Error Authority Explained
§6213(b)(1) allows the IRS to assess additional tax due to “mathematical or clerical error appearing on the return” without issuing a notice of deficiency, which gives the taxpayer the right to contest the assessment in the U.S. Tax Court.
§6213(g)(2) provides 27 different items that constitute a “mathematical or clerical error.” Examples of items on the list include (this is not the entire list):
An error in addition, subtraction, multiplication, or division shown on any return,
An entry on a return of an item which is inconsistent with another entry of the same or another item on such return,
An omission of information that is required to be supplied on the return to substantiate an entry on the return,
An omission of a correct taxpayer identification number (TIN) required under §24 (child tax credit) to be included on a return,
An omission of a correct vehicle identification number (VIN) required under §30D(f)(9) (clean vehicle credit) to be included on a return,
An omission of a correct social security number (SSN) required under §224(e) (qualified tips deduction), or
An omission of a correct SSN required under §225(d) (qualified overtime deduction).
§6213(b)(2) gives a taxpayer 60 days after the math error notice is sent to request an abatement; the IRS must abate the assessment. The IRS cannot collect the assessment during those 60 days. To reassess that amount, the IRS must send a notice of deficiency. The taxpayer is not required to demonstrate that the notice is incorrect; however, doing so may foreclose a future notice of deficiency. For more information, see Internal Revenue Manual 21.5.4, General Math Error Procedures.
New Law Provisions
Under the law, a math or clerical error notice sent by the IRS must include:
A clear description of the error, including the type of error and the specific federal tax return line on which the error was made,
An itemized computation of adjustments required to correct the error,
The telephone number for the automated transcript service, and
The deadline for requesting an abatement of any tax assessed due to the error.
The law also requires the IRS to send a notice related to an abatement of tax assessed due to a math or clerical error that clearly describes the abatement and includes an itemized computation of adjustments to be made to the items described.
This law also requires the IRS to provide procedures for requesting an abatement of tax assessed due to a math or clerical error in writing, electronically, by phone, or in person, and implement a pilot program to send notices of a math or clerical error by certified or registered mail.
These requirements will apply to notices sent after the date which is 12 months after the law’s enactment date.
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Thank you for this update on math errors. Can you show an example how this would be addressed on form 2848?
It’s wild that a law had to be passed to require the IRS to provide an explanation for the changes they make to a return.