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Publication 596
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taxmap/wpubs/p596-013.htm#en_us_publink1000167321

Chapter 5
Disallowance of the EIC

Disallowance of the EIC

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 2010.

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 2010 return to claim the credit for 2010. 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.

taxmap/wpubs/p596-013.htm#en_us_publink1000167323

Form 8862(p30)

rule
Information To Claim Earned Income Credit After Disallowance
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.
taxmap/wpubs/p596-013.htm#en_us_publink1000248416

Exception 1.(p30)

rule
Do not file Form 8862 if either (1) or (2) below is true.
  1. After your EIC was reduced or disallowed in the earlier year:
    1. You filed Form 8862 in a later year and your EIC for that later year was allowed, and
    2. Your EIC has not been reduced or disallowed again for any reason other than a math or clerical error.
  2. You are taking the EIC without a qualifying child for 2010 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.
In either of these cases, you can take the EIC without filing Form 8862 if you meet all the EIC eligibility requirements.
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Exception 2.(p30)

rule
Do not file Form 8862 or take the EIC for:
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More information.(p30)

rule
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 2010 return affect whether you need to attach Form 8862 to your 2010 return or to a later return. The following examples demonstrate whether Form 8862 is required for 2010 or 2011.
taxmap/wpubs/p596-013.htm#en_us_publink100023431

Example 1.(p30)

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Example:(p30) Form 8862 required for 2010
You filed your 2009 tax return in March 2010 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 2010, 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 2010. To claim the EIC with a qualifying child on your 2010 return, you must complete and attach Form 8862 to that return. However, to claim the EIC without a qualifying child on your 2010 return, you do not need to file Form 8862.
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Example 2.(p31)

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Example:(p31) Form 8862 required for 2011
The facts are the same as in Example 1, except that you received the statutory notice of deficiency in February 2011. Because the 90-day period referred to in the statutory notice is not over when you are ready to file your return for 2010, you should not attach Form 8862 to your 2010 return. However, to claim the EIC with a qualifying child for 2011, you must complete and attach Form 8862 to your return for that year. To claim the EIC without a qualifying child for 2011, you do not need to file Form 8862.
taxmap/wpubs/p596-013.htm#en_us_publink1000167325

Exception for math or clerical errors.(p31)

rule
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.
taxmap/wpubs/p596-013.htm#en_us_publink1000167326

Omission of Form 8862.(p31)

rule
If you are required to attach Form 8862 to your 2010 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.
taxmap/wpubs/p596-013.htm#en_us_publink1000167327

Additional documents may be required.(p31)

rule
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.
taxmap/wpubs/p596-013.htm#en_us_publink1000167328

Are You Prohibited From Claiming the EIC for a Period of Years?(p31)

rule
previous topic occurrence Earned Income Credit next topic occurrence
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 2010 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.
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Example 3.(p31)

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Examples:(p31) Cannot claim EIC for 2 years
You claimed the EIC on your 2009 tax return, which you filed in March 2010. 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 2010, 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 2010. You cannot claim the EIC for tax year 2010 or 2011. To claim the EIC on your return for 2012, you must complete and attach Form 8862 to your return for that year.
taxmap/wpubs/p596-013.htm#en_us_publink100023438

Example 4.(p31)

The facts are the same as in Example 3, except that your 2009 EIC was not denied until after you filed your 2010 return. You cannot claim the EIC for tax year 2011 or 2012. To claim the EIC on your return for 2013, you must complete and attach Form 8862 to your return for that year.
taxmap/wpubs/p596-013.htm#en_us_publink100023439

Example 5.(p31)

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Example:(p31) Cannot claim EIC for 10 years
You claimed the EIC on your 2009 tax return, which you filed in February 2010. The IRS determined you were not entitled to the EIC and that your error was due to fraud. In September 2010, 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 2010. You cannot claim the EIC for tax years 2010 through 2019. To claim the EIC on your return for 2020, you must complete and attach Form 8862 to your return for that year.
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