This chapter is for people whose earned income credit (EIC) for any year after 1996 was denied or reduced by the IRS. If this
applies
to you, you may need to complete
Form 8862, Information To Claim Earned Income Credit After Disallowance, and attach it to your 2007 return to claim
the credit for 2007. This chapter explains when you need to attach Form 8862. For more information, see Form 8862 and its
instructions.
This chapter also explains the rules for certain people who cannot claim the EIC for a period of years after their EIC was
denied or
reduced.
If your EIC for any year after 1996 was denied or reduced for any reason other than a math or clerical error, you must attach
a completed Form 8862
to your next tax return to claim the EIC. You must also qualify to claim the EIC by meeting all the rules described in this
publication.
However, do not file Form 8862 if either (1) or (2) below is true.
-
After your EIC was reduced or disallowed in the earlier year:
-
You filed Form 8862 in a later year and your EIC for that later year was allowed, and
-
Your EIC has not been reduced or disallowed again for any reason other than a math or clerical error.
-
You are taking the EIC without a qualifying child for 2007 and the only reason your EIC was reduced or disallowed in the earlier
year was
because the IRS determined that a child listed on Schedule EIC was not your qualifying child.
Also, do not file Form 8862 or take the EIC for:
-
2 years after there was a final determination that your EIC claim was due to reckless or intentional disregard of the EIC
rules, or
-
10 years after there was a final determination that your EIC claim was due to fraud.
For details, see Are You Prohibited From Claiming the EIC for a Period of Years? in this chapter.
The date on which your EIC was denied and the date on which you file your 2007 return affect whether you need to attach Form
8862 to your 2007
return or to a later return. The following examples demonstrate whether Form 8862 is required for 2007 or 2008.
Example 1.
You filed your 2006 tax return in March 2007 and claimed the EIC with a qualifying child. The IRS questioned the EIC, and
you were unable to prove
the child was a qualifying child. In September 2007, you received a statutory notice of deficiency telling you that an adjustment
would be made and
tax assessed unless you filed a petition with the Tax Court within 90 days. You did not act on this notice within 90 days.
Therefore, your EIC was
denied in December 2007. To claim the EIC with a qualifying child on your 2007 return, you must complete and attach Form 8862
to that return. However,
to claim the EIC without a qualifying child on your 2007 return, you do not need to file Form 8862.
Example 2.
The facts are the same as in Example 1, except that you received the statutory notice of deficiency in February 2008. Because the 90-day
period referred to in the statutory notice is not over when you are ready to file your return for 2007, you should not attach
Form 8862 to your 2007
return. However, to claim the EIC with a qualifying child for 2008, you must complete and attach Form 8862 to your return
for that year. To claim the
EIC without a qualifying child for 2008, you do not need to file Form 8862.
Exception for math or clerical errors.
If your EIC was denied or reduced as a result of a math or clerical error, do not attach Form 8862 to your next tax
return. For example, if your
arithmetic is incorrect, the IRS can correct it. If you do not provide a correct social security number, the IRS can deny
the EIC. These kinds of
errors are called math or clerical errors.
Omission of Form 8862.
If you are required to attach Form 8862 to your 2007 tax return, and you claim the EIC without attaching a completed
Form 8862, your claim will be automatically denied. This is considered a math or clerical error. You will not be permitted
to claim the EIC without a
completed Form 8862.
Additional documents may be required.
You may have to provide the IRS with additional documents or information before a refund relating to the EIC you claim
is released to you, even if
you attach a properly completed Form 8862 to your return.
Are You Prohibited From Claiming the EIC for a Period of Years?
If your EIC for any year after 1996 was denied and it was determined that your error was due to reckless or intentional disregard
of the EIC rules,
then you cannot claim the EIC for the next 2 years. If your error was due to fraud
, then you cannot claim the EIC for the next 10 years. The date on which your EIC was denied and the date on which you file
your 2007 return affect the years for which you are prohibited from claiming the EIC. The following examples demonstrate which
years you are
prohibited from claiming the EIC.
Example 3.
You claimed the EIC on your 2006 tax return, which you filed in March 2007. The IRS determined you were not entitled to the
EIC and that your error
was due to reckless or intentional disregard of the EIC rules. In September 2007, you received a statutory notice of deficiency
telling you an
adjustment would be made and tax assessed unless you filed a petition with the Tax Court within 90 days. You did not act on
this notice within 90
days. Therefore, your EIC was denied in December 2007. You cannot claim the EIC for tax year 2007 or 2008. To claim the EIC
on your return for 2009,
you must complete and attach Form 8862 to your return for that year.
Example 4.
The facts are the same as in Example 3, except that your 2006 EIC was not denied until after you filed your 2007 return. You cannot
claim the EIC for tax year 2008 or 2009. To claim the EIC on your return for 2010, you must complete and attach Form 8862
to your return for that
year.
Example 5.
You claimed the EIC on your 2006 tax return, which you filed in February 2007. The IRS determined you were not entitled to
the EIC and that your
error was due to fraud. In September 2007, you received a statutory notice of deficiency telling you an adjustment would be
made and tax assessed
unless you filed a petition with the Tax Court within 90 days. You did not act on this notice within 90 days. Therefore, your
EIC was denied in
December 2007. You cannot claim the EIC for tax years 2007 through 2016. To claim the EIC on your return for 2017, you must
complete and attach Form
8862 to your return for that year.
