www.irs.gov,Internal Revenue Service: After Rejecting 1.7 Million Returns, IRS Offers Help

New 800-number phone service available for seniors confused over whether they've received Economic Recovery Payments.

Forbes 2010 Tax Guide

The Internal Revenue Service is belatedly moving to fix one of this tax filing season's most vexing problems--one that already led more than 1 million taxpayers to have their electronically filed returns rejected.

The problem, which affects mostly new retirees and seniors with part-time jobs, involves the interaction of two economic stimulus provisions Congress passed last year: The $400 per worker ($800 per couple) Making Work Pay credit and the $250 per retiree ($500 per retired couple) Economic Recovery Payment.

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The $250 per person payment was supposed to be sent to those receiving Social Security retirement and disability and Veterans and Railroad Retirement benefits. Recipients who worked in 2009 are also eligible for the $400 worker's credit, but must reduce the $400 by the $250 payment and calculate their Making Work Pay credit on Schedule M. Since the $250 payment was directly deposited into the same checking accounts their Social Security or other benefits checks are put in, some recipients don't know if they got the money.

Beginning Monday, however, the IRS is offering a toll-free automated line for checking on whether you've gotten an Economic Recovery Payment. Taxpayers can call 1-866-234-2942. To retrieve the information, you (or your tax preparer) will need your Social Security number, birth date and your ZIP code at the time you filed your last tax return. (If you file a joint return and need the information for both spouses, you'll have to get the low-down for one, hang up and call back for the other.)

So far this year large numbers of seniors have been getting their electronically filed returns bounced back because, according to the IRS computers, they haven't accurately stated whether they got the $250 payment. IRS National Taxpayer Advocate Nina E. Olson tells Forbes that through last Thursday, 1.7 million returns out of 46 million filed, or nearly 4% of all those filed, have been rejected for this reason. (In some cases, taxpayers attempted to file more than once and so a total of 1.2 million taxpayers have been affected, she says.)

"This will certainly help those taxpayers who can't remember if they received the ERP," said Robert Meighan, a CPA and vice president of Turbo Tax, Intuit's ( INTU - news - people ) tax preparation software unit.