What You Should Know to Assist Your Clients with Form 8836

IRS will send Form 8836, Qualifying Children Residency Statement, to 25,000 taxpayers during the first two weeks of December 2003.  These taxpayers have been selected to test a new compliance initiative for the earned income tax credit (EITC).

If the selected taxpayers claim a child for the EITC on their 2003 return, they must show the child lived with them for more than half the year.  They will be required to complete the Form 8836 and send IRS information such as copies of records, a signed letter, or a Third Party Affidavit.  The taxpayers are required to send the form and required information when they file their 2003 tax return.  The EITC portion of their refunds will be held pending review and acceptance of that information.

The Form 8836 cannot be filed electronically.  Both electronic and paper filers must send the form and information to the IRS by paper.  Electronic returns will be accepted and processed; however, EROs will receive an acknowledgment indicator that the client is part of the test population and must submit the form and information, before the EITC portion of any refund is released.

IRS is testing two different versions of the Third Party Affidavit, Schedule A and B, which are being sent to different populations within the test group.  The taxpayer must use the version that was sent to them.

IRS has established a centralized unit at the Kansas City Campus with specially trained examiners to answer telephone calls and review the information sent by taxpayers.  Taxpayers are encouraged to call the special toll free number (1-800-294-2723) for help in understanding what they must do and for suggestions on documents they can secure to show they meet the residency requirements.

Special Procedures for Returns with Qualifying Child EITC

As part of your standard procedures for preparing returns with EITC, you ensure that your client meets all the EITC requirements.  However, to help reduce your client’s delay in receiving the EITC, you should take some special steps on returns that include EITC with a qualifying child.

1.      Ask Your Client Whether They Received a Notice

Ask your client whether they received a letter (CP Notice 84A.) from IRS in early December asking them to verify they lived with their qualifying child for more than half of 2003. The correspondence contained in Form 8836, Qualifying Children Residency Statement, and either Schedule A or Schedule B, Third Party Affidavit.

2.      Have Your Client Call the 1-800 Number if They Are Unsure Whether They Received the Notice

If your client is unsure whether they received the notice, he/she can call the normal
1-800 number and ask.  A telephone assistor can check the IRS computer records to determine if your client was one of the taxpayers selected for the test.  (Note:  Only a taxpayer or representative with a valid power of attorney for tax year 2003 can ask IRS for this information.)

3.      Remind Client About Form 8836, Qualifying Children Residency Statement

If your client did receive the letter, remind him/her that, in addition to filing Schedule EIC as part of their return, he/she must also complete Form 8836, Qualifying Children Residency Statement, and gather the information to prove the client lived with the qualifying child for more than half of 2003.

4.      Tell Your Client to Call the Centralized Site if They Have Misplaced the Forms

If your client has misplaced the forms, instruct him/her to call the Kansas City centralized site at 1-800-294-2723 to get additional copies of the Form 8836 and the correct version of the Third Party Affidavit.  Because IRS is testing two different versions of the affidavit, it is critical that, if replacement forms are needed, they get the correct version from IRS.

5.      Explain About Documents Needed

The client may prove he/she has met the residency requirement by securing the Third Party Affidavit (the version sent to them, either Schedule A or B), copies of records, or a signed letter.

6.      Explain Possible Need for More than One Document

Your client may need to secure more than one affidavit or other documents to show that he/she lived with the child for more than half of 2003.  The records or letter must clearly show

• The taxpayer’s name, the child’s name, or both names, and
• A street address and the dates that the client and child lived at that address during 2003, and
• The name, address, and phone number of the person or organization that provided the record or letter.

The Third Party Affidavit already contains spaces for the third party to fill in the above information.

Refer to the instructions for the Form 8836 for more information and examples of documents that could be provided.

7.      EITC Acknowledgment Indicator Received by VITA Site

The client may have forgotten about receiving the notice in December, or may have moved and not received it.  Even if that is the case, the ERO will receive an Acknowledgment Indicator if the client was selected for the test and is claiming a qualified child for tax year 2003. You should contact your client to advise them that additional documentation is required.  Your client will receive a Notice 75B within approximately 2 weeks of filing informing him/her that the EITC portion of any refund will be held pending review or receipt and review of requested information.

8.      Assistance Is Available

Specially trained examiners can answer any questions you or your client may have and offer suggestions on how your client can show he/she lived with a qualifying child for more than half the year.  Spanish versions of the forms may also be requested.  The special toll free number at the centralized site is 1-800-294-2723.

Filing the Return Electronically

You can file your client’s return electronically and it will be processed.  However, the EITC portion of any refund will be held pending IRS’s review and acceptance of the information.  Your client must send the form and the required documentation to the following address:

Internal Revenue Service
Stop 4300, Annex R2
Kansas City, MO  64999-0065

The sooner the client sends the information, the sooner IRS can review it and let the client know whether the information was accepted and their EITC released.

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