If your earned income credit (EIC) for any year after 1996 was denied (disallowed) or reduced by the IRS, you may need to
complete an
additional form to claim the credit for 2004.
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 2004 return to claim
the credit for 2004. 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 because 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 (or other documents) and your EIC was then 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 2004 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 was reduced or disallowed due to reckless or intentional disregard
of the EIC
rules, or
-
10 years after there was a final determination that your EIC was reduced or disallowed 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 2004 return affect whether you need to attach Form
8862 to your 2004
return or to a later return. The following examples demonstrate whether Form 8862 is required for 2004 or 2005.
Example 1.
You filed your 2003 tax return in March 2004 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 2004, you received a statutory notice of deficiency telling you that an adjustment
would be assessed
unless you filed a petition in the Tax Court within 90 days. You did not act on this notice within 90 days. Therefore, your
EIC was denied in December
2004. To claim the EIC with a qualifying child on your 2004 return, you must complete and attach Form 8862 to that return.
However, to claim the EIC
without a qualifying child on your 2004 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 2005. Because the 90-day
period referred to in the statutory notice is not over when you are ready to file your return for 2004, you should not attach
Form 8862 to your 2004
return. However, to claim the EIC with a qualifying child for 2005, you must complete and attach Form 8862 to your return
for that year. To claim the
EIC without a qualifying child for 2005, 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 2004 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 2004 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 2003 tax return, which you filed in March 2004. 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 2004, you received a statutory notice of deficiency
telling you an
adjustment would be assessed unless you filed a petition in the Tax Court within 90 days. You did not act on this notice within
90 days. Therefore,
your EIC was denied in December 2004. You cannot claim the EIC for tax year 2004 or 2005. To claim the EIC on your return
for 2006, 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 2003 EIC was not denied until after you filed your 2004 return. You cannot
claim the EIC for tax year 2005 or 2006. To claim the EIC on your return for 2007, you must complete and attach Form 8862
to your return for that
year.
Example 5.
You claimed the EIC on your 2003 tax return, which you filed in February 2004. The IRS determined you were not entitled to
the EIC and that your
error was due to fraud. In September 2004, you received a statutory notice of deficiency telling you an adjustment would be
assessed unless you filed
a petition in the Tax Court within 90 days. You did not act on this notice within 90 days. Therefore, your EIC was denied
in December 2004. You cannot
claim the EIC for tax years 2004 through 2013. To claim the EIC on your return for 2014, you must complete and attach Form
8862 to your return for
that year.
