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What if your tax refund is wrong?

Documentation of the difference

Once you get the official word on why your refund is not what you had expected, it's time to figure out what happened.

A typical notice will show you some basic 1040 information: adjusted gross income, taxable income and total tax due. In each of these categories, the IRS will indicate what you entered and what the agency came up with. A major difference in one of these areas will pretty clearly show you where the problem lies.

The document should also note how much tax you paid and any over- or underpayment. Additional charges or credits, such as interest and penalties, also are taken into account.

"Get out your return and try to reconcile it that way," says Scharin. If you used a tax professional to file your return, call that person for help in clearing up the matter.

In many cases, the notice will include a phone number. Scharin says a personal inquiry directly to the IRS could also help.

"You might want to call before sending documentation," he says. "You might find in speaking with a person, any confusion is cleared up, for good or otherwise." At least you'll know exactly what the agency needs from you to resolve the issue.

Common refund discrepancy causes

"Most likely it is an arithmetic error," says Scharin. In these cases, the IRS simply corrects your calculations and sends you the proper refund amount.

Even tax software doesn't make you immune to addition and subtraction issues.

Scharin recalls one individual who "did his taxes on a computer and forgot to press 'recompute.' So even though he entered in everything correctly, he didn't finish the process."

You also might have claimed something that, based on your income, you're not entitled to, says Scharin. "Income phaseouts, based on your adjusted gross income, affect several credits," he says.

But it just as easily could be an IRS error.

"You may have made estimated tax payments, and one was not credited properly," says Scharin. "From your records, you overpaid or paid properly, but the IRS doesn't think so. So send them a copy of the canceled check."

Estimated tax payments are a common culprit in divergent refund amounts. The amount of tax on the return is calculated correctly, but the filer and IRS come up with a difference on the amount of tax paid.

Other numbers that cause problems are those nine Social Security digits. When any of those are wrong (such as transposed numbers, or they don't match other records, perhaps involving name changes after marriage or adoption), problems with your tax return -- and refund -- appear.

Refund issues also crop up when names of dependents don't match Social Security numbers. Husbands and wives have different names, as do their children.

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