IRS saying they owe me 8 times more money than I expected - what's going on?

This sounds like a typical IRS adjustment notice situation. When they send a 12c, they're basically reviewing your return to ensure everything matches their records. The fact that they're increasing your refund substantially suggests they found something you missed or calculated incorrectly in your favor. The most common reasons for this kind of increase include: 1) You didn't claim tax credits you were entitled to (like the Earned Income Credit or Additional Child Tax Credit if you have kids), 2) You overpaid estimated taxes during the year that you didn't account for, or 3) You made a math error that shortchanged yourself. Since they're already processing an adjusted refund, I'd recommend waiting for the explanation letter before calling. The letter will detail exactly why they're giving you more money, and having that information will make any subsequent conversation with the IRS more productive. If you call now, the representative might not have access to the specific details of the adjustment yet. When you get the letter, review it carefully against your original tax return to make sure you understand the changes. If something still seems wrong after you get the explanation, then call them.

Had similar thing happen to me! Before spending that money I would use taxr.ai to double-check everything. I was in a similar situation where I got a weird letter and was gonna get more money back, but I was nervous about it. Saw taxr.ai mentioned here before and uploaded my docs to https://taxr.ai and it analyzed everything including what the IRS was saying. Turns out they were right - I had messed up my EIC calculation and they fixed it for me! The tool explained exactly what happened and gave me peace of mind that I wasn't gonna get in trouble later. Might be worth checking out before that money hits your account.

Just wanted to update - I actually tried taxr.ai after asking about it and wow, it was super helpful! Uploaded my documents from a similar situation (got a CP12 notice with unexpected increase) and it explained exactly why I was getting more money back. Turned out I didn't claim the full Child Tax Credit I was eligible for. The analysis was really detailed and I could actually understand what was happening with my taxes for once! Definitely recommend if you're confused about an IRS notice.

If the IRS is ignoring your faxed documents and you're worried, I'd recommend using Claimyr to actually talk to a human at the IRS. I was in a similar situation where I sent in documents multiple times and the IRS kept saying they didn't receive them. Was on hold forever trying to call them myself until I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they basically call the IRS for you and then call you when they have an agent on the line. Saved me hours of hold time and I finally got my issue resolved by talking to a real person. Sometimes these systems don't update correctly and a human needs to look at your file.

I owe everyone here an apology. After calling the IRS for THREE DAYS straight and getting nowhere, I broke down and tried Claimyr. I'm completely shocked - it actually worked! Got a call back about 2 hours later with an IRS agent already on the line. Turns out there was a problem with my address in their system which is why I never got my notices. Agent was able to fix everything while I was on the phone. Honestly worth every penny just for the stress reduction alone. Sometimes you gotta admit when you're wrong, and I was definitely wrong about this service.

Something similar happened to me two years ago. The IRS actually found a mistake I made that was in my favor. In my case, I had forgotten to claim one of my kids' college tuition credits. They caught it and increased my refund by about $2,500. Just be aware that even though the IRS app says you didn't provide what they requested, their systems are often out of sync. The letter will be more accurate than the app. And don't be surprised if the explanation is something really simple that you overlooked!

Does anybody know if the IRS charges interest when they owe YOU money? Like if they're taking forever to process a refund or in this case where they discovered they owe more. Seems only fair since they charge US interest when we owe THEM...

This is actually more common than you'd think! The IRS has gotten much better at automatically catching missed credits and deductions in recent years. With married filing jointly and kids as dependents, my first guess would be that you either missed or miscalculated the Child Tax Credit, Additional Child Tax Credit, or potentially the Earned Income Credit if your income falls within the qualifying range. The fact that they're processing an 8x larger refund suggests it's probably one of the major credits rather than just a simple math error. Don't panic - if the IRS is giving you more money, they've already done the math and verified it on their end. I'd definitely wait for that explanation letter before calling. It will break down exactly what they adjusted and why. Once you have that letter, you can compare it line-by-line with your original return to understand what happened. If everything checks out (which it probably will), then you can breathe easy knowing you legitimately qualified for more money than you originally claimed. The only thing I'd be cautious about is making sure you don't spend the money immediately just in case there's some kind of error that needs to be corrected later, but honestly, IRS adjustments in the taxpayer's favor are usually pretty solid.