Overview

An IRS audit that questions or disallows your EITC claim is stressful but not always final. You can respond to the audit, provide additional evidence, and—in many cases—have the credit reinstated or file an amended return to claim it if you missed it originally. The process centers on documenting eligibility for earned income, qualifying child tests (if applicable), and meeting IRS deadlines and form requirements. For the latest IRS rules and limits, consult the IRS EITC page: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit.

Step-by-step checklist after an audit

  1. Read the audit notice carefully
  • Identify exactly which elements of your EITC claim the IRS questioned: income amounts, qualifying child status, residency, filing status, or missing signatures. The notice will list requested documents and a response deadline.
  1. Confirm the timeline and your rights
  • Typical deadlines are 30 days (or sometimes 60) to respond; the notice will specify. If you need time to gather records, contact the examiner immediately and request a reasonable extension in writing. Keep copies of all communications.
  1. Gather focused documentation
  • For earned income: W‑2s, Forms 1099, pay stubs, employer letters, signed offer letters, or settlement documents. If an employer is missing a W‑2, a signed statement from the employer and pay records help.
  • For qualifying children: birth certificates, school records, medical records, daycare receipts, court custody orders, or a signed statement showing residency (names and dates). These documents prove the relationship, age requirement, residency, and joint-filing tests.
  • For custody/shared parenting: court orders, custody agreements, school enrollment forms, and dated mail or utility bills showing the child lived with you.
  • For self-employment income: books and records, 1099‑NEC forms, bank deposits tied to business activity, logs of hours worked, receipts, and expense records.
  1. Reconstruct missing records when necessary
  • If original pay stubs are lost, request wage transcripts using the IRS Wage and Income Transcript or ask the employer for copies. State unemployment or benefit records can substitute in some cases. Keep a contemporaneous explanation of how the records were reconstructed.
  1. Complete Form 8862 when required
  • If the IRS previously disallowed your EITC (or other refundable credits) and you now want to claim it again, you usually must file Form 8862, Information To Claim Earned Income Credit After Disallowance. Follow the form instructions carefully; incorrect answers can delay or deny your claim. See the IRS Form 8862 page: https://www.irs.gov/forms-pubs/about-form-8862.
  1. File an amended return if appropriate
  • If the audit was closed and you later discover you were eligible but didn’t claim the EITC, you can file Form 1040‑X to amend within the normal refund statute of limitations (generally three years from the date you filed the original return or two years from the date you paid the tax, whichever is later). For guidance about amending returns to reclaim credits, see our guide: “Amending Returns to Claim Missed Credits: Child Tax and EITC” (https://finhelp.io/glossary/amending-returns-to-claim-missed-credits-child-tax-and-eitc/).
  1. Submit a clear response packet
  • Include a cover letter summarizing items attached, copies (not originals) of documentation, a copy of the IRS audit notice, relevant pages of the tax return, and completed forms (such as 8862 or 1040‑X where applicable). Send via certified mail or follow the IRS examiner’s preferred submission instructions and retain proof of delivery.
  1. Follow up and track the case
  • Note the examiner’s contact, case number, and response timeframe. If processing seems stalled, contact the IRS examiner, or if needed, the Taxpayer Advocate Service (TAS) for assistance with significant delays: https://taxpayeradvocate.irs.gov/.

Key eligibility areas the IRS examines

  • Relationship: The child must be your son, daughter, stepchild, foster child, sibling, or descendant of these categories.
  • Age: Typically under 19 (or under 24 if a full‑time student) or permanently disabled.
  • Residency: The child must have lived with you more than half the year—court orders, school records, and medical bills are commonly accepted proofs.
  • Support and joint return rules: The child cannot file a joint return for the year and cannot provide more than half of their own support.
  • Earned income limits and investment income limit: These change year to year. Don’t rely on prior‑year numbers—check the IRS EITC page for the most current thresholds.

What to expect if the IRS denies or reduces EITC after your response

  • You will receive a written explanation of adjustments and any additional tax, interest, or penalty. If the IRS disallows the credit again, you may be required to file Form 8862 to claim EITC in future years.
  • If you disagree, you can request an appeal through the IRS Independent Office of Appeals. For cases involving hardship, TAS provides independent help.
  • If an error is determined to be fraudulent or due to reckless disregard of rules, the IRS may assess penalties and require repayment of EITC with interest. Avoid making claims you cannot support.

Practical strategies I use with clients

  • Start with the smallest gaps: identify which eligibility test the IRS questioned and address that first. If the issue is residency for a child, school records and dated mail often resolve it quickly.
  • Rebuild income records by requesting wage and income transcripts from the IRS and copies from employers. I’ve had clients reinstate credits after reconstructing pay records for temporary jobs.
  • Keep a documentation folder during the tax year. In my practice, clients who keep organized digital copies of pay stubs, custody orders, and daycare receipts resolve audits faster and with better outcomes.
  • When cost is a concern, look into free help: VITA (Volunteer Income Tax Assistance) sites or Low Income Taxpayer Clinics can provide representation or advice at low or no cost.

Common pitfalls to avoid

  • Waiting until the last minute to respond to the audit notice. Deadlines matter.
  • Sending incomplete evidence or unsigned statements. The IRS frequently rejects unsupported assertions.
  • Filing Form 8862 incorrectly or forgetting to attach required documentation.
  • Assuming past eligibility guarantees future approval—rules and thresholds change.

Timeline and deadlines

  • Response times and appeal windows are stated on the audit notice. For refunds or amended claims, the usual statute of limitations is three years from the original filing date (or two years from payment of tax), whichever is later. When in doubt about deadlines, confirm with an IRS publication or a tax professional.

When to get professional help

  • If the amount in dispute is large, if the IRS alleges fraud or intentional disregard, or if multiple years are involved, hire a tax professional experienced in IRS examinations.
  • Low‑income taxpayers can contact a Low Income Taxpayer Clinic for representation if they cannot afford private counsel.

Useful resources

Final notes and disclaimer

This guide explains common steps to claim or re‑establish the EITC after an IRS audit and points you to official IRS forms and resources. It is educational and does not replace personalized tax advice. For complex situations, contact a qualified tax professional, a Low Income Taxpayer Clinic, or the Taxpayer Advocate Service. Information and IRS forms referenced here were checked for accuracy as of 2025, but EITC rules and income limits change annually—verify current thresholds on the IRS website before filing.