IRS warns Child Tax Credit portal may have wrong amounts

The Internal Revenue Service is urging people to use the information in their online taxpayer accounts for the most up-to-date figures on the amount of the advance Child Tax Credit to include on their tax returns, instead of the numbers stated in the letters it has been sending and in the revamped Child Tax Credit site it recently unveiled.

The up-to-date information will be available Monday, the IRS said in a fact sheet that it posted Friday. “Starting Monday, January 31, find the Advance Child Tax Credit payment information you need to file your 2021 tax return in your online account,” said the IRS. “Until then, use the amount in Letter 6419 sent by mail. Don’t use the payment details in the Child Tax Credit Portal.”

The IRS began hearing questions from reporters the day tax season started on Jan. 24 about why some of the letters the IRS had been sending to taxpayers who had received the monthly Child Tax Credit payments seemed to have incorrect amounts (see story). The IRS believes the inconsistencies are relatively limited and mostly apply to taxpayers who have changed addresses, and whose payments were undelivered, or where the direct deposit failed to work, perhaps because they changed bank accounts.

Andrew Harrer/Bloomberg

“If taxpayers have questions or concerns about the information in their letter, they can also go to IRS.gov and look on their online account and look for the information on IRS.gov,” said Ken Corbin, chief taxpayer experience officer at the IRS and commissioner of the IRS’s Wage and Investment Division, during a news conference that day. “We are still looking into some of the information we’ve heard about the notices not being correct. We do not believe this is a widespread problem, and as soon as we get through looking at that, we’ll put some more information out that will be helpful to the taxpayers and to you to share back with them.”

That day, the Treasury Department relaunched a revamped Child Tax Credit portal, ChildTaxCredit.gov, where it said parents would be able to access the remainder of the expanded Child Tax Credit or the full amount of the CTC as tax filing season begins. However, the information provided there is apparently not as up-to-date as would be found in the online taxpayer accounts.

“The Online Account includes the official figures in the IRS systems; using this number will help avoid potential processing and refund delays,” said the IRS on Friday. “Taxpayers should correctly include the amount of advance Child Tax Credit payments they received last year when filing their tax return to ensure a timely refund.”

Tax transcripts may also have the wrong information, the IRS warned: “The IRS Online Account has the most current advance payment information. Caution: Do not rely on the Child Tax Credit Update Portal or Tax Transcripts for the advance payments total; this information may be outdated.”

Taxpayers who changed their bank accounts may also have received the wrong information in the letters sent by the IRS. “A limited group of taxpayers may receive an IRS letter with an incorrect amount of the payments received,” said the IRS. “Those in this small, affected group generally involve people who moved or changed bank accounts in December 2021, and their checks were returned as undeliverable, or their direct deposits were rejected. The IRS encourages anyone who thinks the letter might not be accurate to rely on the amount of payments reflected in their Online Account on IRS.gov.”

Some couples may also experience some confusion if they filed joint tax returns and the IRS has special advice for them. “Letters sent to taxpayers who filed as Married Filing Joint are being sent to each spouse separately with only their half of the payments received,” said the IRS. “This means married taxpayers will each receive a letter, and they will need to combine the information from the letters when they file their joint return. If the advance payments total differs between their Letter 6419 and their IRS Online Account, rely on the total in their Online Account.”

In general, here are the steps for reporting the correct information, according to the IRS:

“If someone received advance payments of the Child Tax Credit, they need to reconcile or compare the total amount received in 2021 with the amount they are eligible to claim on their tax return. "Reconciling" the advance Child Tax Credit payments means:

1. Compare the total amount of the advance Child Tax Credit payments that a taxpayer received during 2021 (even if that amount is $0) with
2. The amount of the Child Tax Credit they can properly claim on their 2021 tax return.

To reconcile — or compare — these amounts, taxpayers will need to do the following:

• Get the advance payments total and number of qualifying children in their IRS Online Account. Taxpayers can also refer to Letter 6419. If the amount in their Online Account differs from their letter, they should rely on the amount reflected in their Online Account.
• Enter the information when prompted by their tax software or on Schedule 8812 of the Form 1040.“

Selfie authentication

One other issue is that the IRS is beginning to introduce taxpayer authentication technology for accessing online taxpayer accounts through a third-party service called ID.me that requires users to submit a selfie and a government-issued document like a driver’s license or passport (see story). The new service is expected to be fully rolled out this summer, but some taxpayers are already encountering the requirements if they are setting up their accounts for the first time.

Some cybersecurity experts are worried about the new technology. “While it’s encouraging to see the IRS add another layer of security to their authentication process (especially one that’s identity based), this opens the door for a slew of identity-based challenges and risks – in particular, the use of biometric technology for identity verification purposes poses accessibility challenges,” said Paul Laudanski, head of threat intelligence at the cybersecurity company Tessian. “Facial recognition technology, for example, has been proven time and time again to have biases and privacy implications that must be carefully considered for both functional and ethical perspectives. In addition, not all people have equal access to biometric authentication capabilities, whether due to lack of access to reliable internet services, devices with compatible cameras and sensors, or simply because they don’t have compatible physical characteristics. This also presents issues with addressing identity theft. One other potential vulnerability to consider is that the IRS is implementing a third-party application to manage this personal information. As we saw with the Kaseya attack six months ago, companies are only as strong as their supply chain. In this case, all third-party applications will need to ensure they are bulletproof due to the amount of information they will be able to access. Along with organizations providing multi-factor authentication to protect sensitive data, consumers must also ensure their own systems and devices are secure and protected.”

ID.me believes its service provides improved security. “We are committed to ensuring everyone can verify their identity online and use it to access essential services,” said ID.me CEO and founder Blake Hall in a statement. “ID.me combines best-in-breed 1:1 Face Match technology with video chat agents available as backup. We remain the only digital identity verification service certified against the National Institute of Standards and Technology (NIST) guidelines to offer three ways to verify your identity, including automated self-serve, live video chat, and in-person processes. Our 1:1 Face Match is comparable to taking a selfie to unlock a smartphone. ID.me does not use 1:Many Facial Recognition, which is more complex and problematic. Further, privacy is core to our mission and we do not sell the personal information of our users."