This past week a tax client received a notice from the IRS changing the 2020 tax return in the area of the Recovery Rebate Credit.  The notice did not specifically state a reason for the change, but instead stated the "error" was in one or more of the following areas:

• The SS number of one or more of the individuals claimed as a qualifying dependent was missing or incomplete.  No, the individual(s) claimed as a qualifying dependent and their SS number has not changed in 9 years and is correctly reported in the return.
• The last name of one or more individuals claimed as a qualifying dependent was missing or incomplete.   No, the last names of the individual(s) claimed as a qualifying dependent has not changed in 9 years and is correctly reported in the return.
• One or more individuals claimed as a qualifying dependent exceeds the age limit.   No, age of the qualifying dependent 9 years and is correctly reflected in the return and correctly included in the Recovery Rebate Worksheet.
• The amount was computed incorrectly (683D).  By process of elimination, this must be the change made by the IRS for the amount claimed as the Recovery Rebate Credit on the 2020 tax return.  But I do not understand why?  The client received $1,065.97 for the 1st Economic Impact Payment and $515.97 for the Additional Economic Impact payment.  Both amounts are correctly included in the Recovery Rebate Worksheet and were ACTUAL AMOUNTS RECEIVED, not estimated amounts.  In addition the AGI for 2019 was $165,361 and the AGI for 2020 was $161,811.  The AGI in 2020 actually decreased from 2019.   What am I missing here?  It appears that either the Lacerte tax program is wrong, or the IRS is wrong.  If I am wrong, please point out to me where I am wrong based on this information. 

Any assistance would be greatly appreciated.

Much thanks!

Paul