IRS Must Now “Show the Math”: What the New IRS MATH Act Means for Taxpayers — And How to Protect Yourself

The IRS sends millions of math-error notices every year. These notices adjust a taxpayer’s return—sometimes reducing a refund, sometimes increasing taxes owed—often without explaining the reason for the change. Many taxpayers don’t realize that if they don’t challenge the notice within 60 days, they lose their right to dispute it later.

President Trump has now signed the IRS MATH Act (Math and Taxpayer Help Act) into law, creating major improvements in transparency and taxpayer rights. This is a significant win for taxpayers, CPAs, and small-business owners—especially those who rely heavily on meticulous record-keeping, such as YouTubers, Shopify store owners, Amazon sellers, filmmakers, doctors, dentists, creators, and high-income professionals.

At Velin & Associates, Inc., we’re already preparing clients for how this new law affects IRS communications and what steps to take if a math-error notice arrives.

What the IRS MATH Act Requires the IRS to Do

Under the new law, the IRS must:

✅ Provide a clear explanation of any tax-filing error

Not just a generic message—actual detail of what line item changed and why.

✅ Show the mathematical adjustments

If the IRS recalculates your refund/tax due, they must show the numbers.

✅ Inform taxpayers of their right to dispute

Taxpayers must receive a clear notice that they have 60 days to challenge the adjustment.

✅ Implement a certified-mail pilot program

Some notices will now be sent by certified mail to reduce lost mail and ensure receipt.

This law forces the IRS to give taxpayers the same transparency that taxpayers are required to give the IRS.

Why This Matters: Millions of Taxpayers Are Affected

Historically, IRS math-error notices were:

❌ Confusing
❌ Vague
❌ Missing explanations
❌ Not received due to lost mail
❌ Lacking clear appeal instructions

This resulted in:

• Unexpected lower refunds
• Accidental acceptance of IRS changes
• Lost rights to dispute legitimate errors
• Stress and wasted time

Now the IRS must give taxpayers actual evidence behind their adjustments.

Examples:

1. YouTuber / Creator — Wrong 1099 Reported

A YouTuber receiving income from multiple platforms gets an IRS math-error notice claiming underreported income. Before the MATH Act, the notice might simply state:

“We changed your refund amount due to a calculation error.”

Now the IRS must provide detail like:

• “Form 1099-NEC from Google LLC shows $18,400 instead of $14,400.”
• “Refund reduced by $1,020.”
• “You have 60 days to dispute.”

How Velin & Associates helps:
We review platform payouts (Adsense, TikTok Creator Fund, brand deals) and compare them to IRS data. If YouTube issued a corrected 1099, we dispute the notice with documentation.

2. Shopify Store Owner — Incorrect Inventory Adjustment

A Shopify ecommerce business gets a math-error notice that their cost-of-goods-sold (COGS) calculation was “incorrect.”

Under the new law, the IRS must specify:

• “Inventory reported: $72,000. IRS system shows $60,000.”
• “Difference: $12,000.”

How Velin & Associates helps:
We review Shopify reports, merchant processor statements, and supplier invoices to correct the IRS assumption or verify the client’s numbers.

3. Amazon Seller (FBA) — Sales Tax Confusion

An Amazon seller receives a math-error notice claiming mismatched gross sales.

Now the IRS must show:

• The exact 1099-K totals they used
• How their calculation resulted in additional tax
• Why the refund changed

How Velin & Associates helps:
We reconcile Amazon’s FBA reports, refunds, chargebacks, and marketplace facilitator taxes to confirm or dispute the change.

4. Doctor or Dentist — Deduction Adjustment

A medical practice owner gets a math-error notice stating their retirement contribution deduction is “overstated.”

Now, the IRS must show:

• Line item changed
• Actual vs allowed deduction
• How the tax changed
• How to challenge it

How Velin & Associates helps:
We verify contributions, practice management system payroll records, and plan documentation to ensure deductions were correct.

5. Filmmaker / Creative — Missing Depreciation Calculation

A filmmaker buying equipment receives a vague IRS notice claiming depreciation “error.”

Under the MATH Act, the IRS must now list:

• Equipment listed
• Depreciation used by taxpayer vs IRS
• Dollar differences

How we help:
We confirm bonus depreciation rules, equipment classification, and whether the IRS calculation is valid.

6. High-Net-Worth Individual — Investment Reporting Issue

A high-income taxpayer gets a math-error notice for supposedly incorrect capital gains.

Now the IRS must disclose:

• Which brokerage reported mismatched figures
• How much gain or loss the IRS recalculated
• The exact impact on tax liability

How we help:
We reconcile brokerage statements, 1099-B forms, and K-1s to verify accuracy.

What You Should Do If You Receive a Math-Error Notice

1. Do not ignore it.

You only have 60 days to respond.

2. Send the notice to your CPA immediately.

3. Gather your records:

• 1099s
• W-2s
• Bank statements
• Platform payouts
• Brokerage summaries
• Expense documentation⠀

4. Let a CPA communicate with the IRS

Many notices contain IRS errors or outdated third-party information.

Why Work With Velin & Associates, Inc.

Our firm regularly handles IRS notices for:

📌 YouTubers & Creators
📌 Shopify businesses & online commerce sellers
📌 Amazon FBA sellers
📌 Filmmakers & production professionals
📌 Medical practices & doctors
📌 Dentists & dental practices
📌 High-net-worth individuals

We analyze notices, file disputes, and ensure clients do not accidentally accept IRS errors.

Most importantly—we “show the math” right back to the IRS.

Final Thoughts

The IRS MATH Act is a step toward transparency and fairness. But taxpayers must still stay vigilant: a 60-day deadline is strict. The sooner you involve a CPA, the better your chances of successfully disputing any incorrect IRS adjustment.

If you receive ANY IRS notice — or want help preventing one — Velin & Associates is here to guide you. For more information about our tax planning services, contact us today: visit our website.

Velin & Associates, Inc

8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org

CPA for YouTubers | CPA for Shopify Store | CPA for Online Commerce | CPA for Creators | Shopify Store CPA | CPA for Filmmakers | CPA for Amazon Business | Amazon Business CPA | CPA for Dental Practice | Dentist CPA | Dental Business CPA | Online Commerce CPA | CPA for TikTokers | CPA for Doctors | CPA for Medical Practice | CPA for High Net Worth Individuals