Notice CP75 and Earned Income Tax Credit

Taxpayers will receive a Notice CP75 because the IRS is auditing your tax return. The IRS will retain your refund until they finish the tax audit related to claiming the earned income creditYou must send the information that the IRS needs before the IRS can give a refund and pay you the earned income credit.  The CP75 letter is very carefully worded about what exactly the IRS is looking for. People who do meet the tests will pass, but the letter is sent because the IRS has reason to believe you won’t.

The Internal Revenue Service (IRS) accepts most federal returns as filed. Some returns, however, are examined, or audited, to determine if income, expenses, and credits are reported accurately. Most IRS audits are not actually as bad as they sound and can typically be resolved very easily.


Understanding Notice CP75

This a is a very important warning from the IRS and could lead to penalties. It is extremely important that you contact the IRS no later than on the date indicated in the Notice CP75. If you need more time to gather all the information we request, please call the number on the notice to inform the IRS. It is also important that the IRS can contact you during the audit;to another address if you move or change your phone number, please let the IRS know by calling the toll-free number on the notice or by faxing to 855-235-6788 part of your response message indicating the update.

What is Notice CP 75?

Notice CP 75 tells you which parts of your tax return being audited the IRS . Other forms included tell you what to send for a refund or provide other useful information. The notice includes a lot of information and materials but the IRS can help you understand every step of what to do. You should have a copy of your tax return handy when analyzing this notice. At this point, it may be necessary to consult and tax lawyer on CPA to handle the Notice CP75.


Notice CP75 and Earned Income Credit

The IRS needs documentation to verify the Earned Income Credit (EIC) that you claimed. The EIC and/or the Additional Child Tax Credit (ACTC) portions of your refund are being held pending the results of this audit. If you claimed the Premium Tax Credit (PTC), that portion of your refund is also being held.


IRS Notice CP 75/CP 75A/CP 75B – EIC Portion of the Refund Delayed

The CP 75 series of notices are issued to inform the taxpayer that their Earned Income Credit portion of their refund is being delayed while the IRS is examining the return or determining their eligibility. The notice will state why the IRS is delaying the Earned Income Credit portion of your refund and what information or documentation you need to provide so the determination of your tax refund can be completed.


Notice CP75 and Earned Income Credit

The first item listed is the tax credit for earned income. Your package includes a Form 886-H-EIC (PDF) indicating all other documents that you can send to prove he can claim the EIC with your child or children who qualify. You can send any combination of these documents to get the information we need. See Schedule EIC (PDF) (Schedule EIC in pdf format) included with your tax return and follow the steps for each of the children listed:



What Information do you need to verify Earned Income Tax Credit?

  • First, you must prove that he lived with his son in the US for more than half the year:
    • If your child lived with you at the address listed on your notice, you must send a document stating that his son lived in the same direction during the tax year. For example, you could send us copies of your child’s school grades include your name and show the direction of his son. The dates of the documents have to be more than six months of the tax year.
    • If you moved to address both you and your child lived at another address, send us documents showing the same address for both of you during the tax year.
    • If your child does not attend school, you can send copies of medical records or a statement signed by the child care provider.
    • If you can not prove your child lived with you for more than half the year, then you do not qualify for the EIC .
  • Second, you must try your relationship with your child. The child must be related to you in any of the ways listed on Form 886-H-EIC. The form provides examples of what to send to test the relationship between you.
  • Third, if your child is 19 years of age or older, must show that:
    • Your child was under 24 years old and was full-time student for at least five months of the tax year (can do so by sending copies of official school records), or
    • Your child is permanently and totally disabled, sending a copy of any of the official documents listed on Form 886-H-EIC.

You can only claim the tax credit earned income if your child lived with you for more than half the year in the United States, if your child is related to you in any of the ways listed on Form 886-H -EIC and if your child had an eligible age. Your child must meet three conditions to qualify you for the loan. If you can not prove the three conditions, you may still be eligible for the credit without having a qualifying child.


Why was my  tax return selected for audit?

While most returns are accepted as filed, some are selected for examination. The IRS examines (or audits) some federal tax returns to determine if income, expenses, and credits are being reported accurately. The IRS selects returns for examination using various methods which include random sampling, computerized screening, and comparison of information received by the IRS such as Forms W-2 and 1099. Having your return selected for examination does not suggest that you made an error or were dishonest.


How does the IRS select Audits?

Another way is to use information from compliance projects that indicates a return may have incorrect amounts. These sources may include newspapers, public records, and individuals. If we determine the information is accurate and reliable, we may use it to select a return for examination.


Notice CP75 IRS Help

  • Call the 1-800, 1-866 or 1-888 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf usingForm 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.