New Law Requires IRS to Explain Tax Return Math Errors

In a move designed to improve transparency and strengthen taxpayer rights, President Trump has signed the IRS Math and Taxpayer Help (MATH) Act into law. This bipartisan legislation, which received support from the American Institute of CPAs, introduces new requirements for how the IRS communicates with taxpayers about math errors on their tax returns.

What Is the IRS MATH Act?

The IRS MATH Act addresses a longstanding issue: the lack of clarity in IRS math error notices. Historically, when the IRS identified a math error on a tax return, the notice sent to the taxpayer often failed to explain what was changed or why. Many taxpayers were left confused about the adjustment and unaware of their right to challenge the IRS’s determination.

The MATH Act introduces several important changes:

• Clear Explanations: The IRS must now provide a detailed explanation of any math error, including which item was changed and the reason for the adjustment.

• Refund Clarity: Notices must explain why a taxpayer’s refund is higher or lower than expected.

• Challenge Window: Taxpayers must be informed that they have 60 days to dispute the IRS’s assessment of a math error. Previously, many were unaware of this right and missed the opportunity to respond.

Why This Matters for You

Millions of math error notices are sent by the IRS each year. Under the old system, many taxpayers did not receive enough information to understand or contest the changes made to their returns. The new law aims to ensure that taxpayers are fully informed and have a fair chance to respond if they disagree with the IRS’s findings.

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Questions?

Contact HFM CPAs for questions on how this may affect your specific situation. Our team stays current with evolving tax and related legislation to help you navigate new opportunities and requirements.

HFM CPAs provides specialized accounting, tax, and assurance services to individuals and businesses across Connecticut and Rhode Island.