The IRS has issued a news release indicating that some 286,000 letters recently mailed to taxpayers who claimed the Earned Income Credit on their 1999 income tax returns have incorrect information.

The letters include questions to taxpayers about their eligibility for the earned income credit claimed on their tax returns for 1999, targeting specifically the condition that any children used to calculate eligibility must have lived with the taxpayer for more than half of the year.

Unfortunately, the letter suggested that taxpayers with issues related to child custody and the earned income credit should contact state child support agencies for responses to their questions. This recommendation was incorrect; the IRS now says that taxpayers with these issues should contact the IRS at 1-800-829-1040 for answers to questions on those issues. The IRS will be sending a follow-up letter to reinforce the requirements for earned income credit eligibility, the procedures to take if the credit was incorrectly claimed and the correct location to call for assistance.

The IRS issued an alert regarding "balance due" notices it sent in past weeks. Due to a computer programming error, more than 99,000 notices to taxpayers showing balances due to the IRS had incorrect calculations and mislabeled line items. The IRS says that in some cases, the notices displayed the following problems:

The "total payments and credits" line on the notice was blank and the amount that should have been shown on the "total payment and credits" line was incorrectly printed on the line below and labeled "overpaid tax."

However, the total amount due to the IRS listed on the notices was correct.

The IRS actually mailed more than 55,000 of these problematic notices before the error was discovered.

The mailing of the remaining notices with problems were delayed so that the IRS could include an explanation of the problem and reflect an extension of the due date on the notice. In most cases, taxpayers were given four additional weeks to pay the balance due.