EITC Audits and Reviews: What Can Trigger Them and How To Prepare

The Earned Income Tax Credit (EITC) can provide a valuable refund for many working families. Because the credit can be large and is refundable, it is also an area the Internal Revenue Service (IRS) often reviews more closely.

This guide from HowToGetAssistance.org explains, in plain language, what may trigger an EITC review or audit, what to expect if your return is selected, and how to prepare and respond through official IRS channels. HowToGetAssistance.org is not part of the IRS or any government agency, and it is not a place to file taxes, apply for tax credits, or check refund status. Instead, this article is meant to help you understand the process so you can work directly with the official IRS systems or a qualified tax professional.

Understanding the EITC and Why It’s Reviewed Carefully

The Earned Income Tax Credit is a federal tax credit for low- to moderate-income workers, especially those with children. It is designed to:

• Reduce the amount of tax you owe
• Potentially increase your refund if the credit is more than your tax

For many households, the EITC can be one of the largest parts of their refund. Because of this, the IRS regularly:

• Verifies eligibility
• Checks income and dependent information
• Reviews returns that claim the EITC more carefully than some other items

This does not mean you did anything wrong if your return is reviewed. Many honest taxpayers are selected for EITC-related reviews or audits simply because of how the IRS screens returns.

Types of IRS Reviews That Can Affect EITC

When people talk about “EITC audits,” they may be referring to several types of IRS actions. These usually include:

1. Automated Pre-Refund Review (EITC Holds)

Sometimes the IRS:

• Flags a return automatically for extra checks
• Holds the EITC portion of the refund until the review is complete

Common with:

• Mismatched income information
• Questions about children or filing status

You may see messages in the IRS online tools or a notice in the mail.

2. Correspondence Audit (By Mail)

This is one of the most common EITC-related reviews.

The IRS may:

• Send you a letter asking for proof of income, residency, or your child’s relationship to you
• Give you a deadline to mail or fax documents

You usually do not meet in person; everything is handled through mail, fax, or sometimes online upload.

3. Office or Field Audit (Less Common)

In some cases, the IRS may:

• Ask you to visit a local IRS office with documents, or
• Schedule a field audit where an IRS agent reviews more of your records

This is less common for EITC only but can happen if other issues are also involved.

Common Triggers for EITC Reviews and Audits

While only the IRS can decide which returns to review, there are some common situations that tend to trigger EITC checks.

1. Conflicting Claims for the Same Child

A very frequent trigger is when more than one person claims the same child for EITC or other child-related benefits.

This can happen when:

• Parents are separated, divorced, or never married
• A grandparent or other relative also claims the child
• A child moves between households during the year

The IRS system may:

• Flag the return
• Ask for proof of where the child lived most of the year
• Request documents to show your relationship to the child

2. Income That Doesn’t Match IRS Records

The IRS compares information on your return with documents it receives from employers and other payers (like W-2s, 1099s, etc.).

Triggers may include:

• Reporting less income than what employers reported to the IRS
• Claiming EITC while no earned income (like wages or self-employment) appears in IRS records
• Large differences between reported income and prior years

3. Changing Filing Status or Dependents Frequently

Frequent changes can look unusual to the IRS, especially if:

• You switch between Single, Head of Household, or Married Filing Separately often
• Your list of qualifying children changes significantly each year

These changes might be totally legitimate, but they can still lead to an EITC review.

4. Self-Employment or “Gig” Income

For people who are self-employed or working “gig” jobs (like rideshare, delivery, or freelance work), EITC reviews may be triggered when:

• Reported business income appears very low compared to expenses
• There are no records supporting the business
• Income is not reported on standard forms, like 1099-NEC, but EITC is still claimed

The IRS may ask for proof of your business activity and income, such as invoices, receipts, or bank statements.

5. Prior EITC Problems or Disallowance

If you had EITC denied or adjusted in a previous year, your future EITC claims may get more attention. In some situations:

• You may be required to file Form 8862 (Information To Claim Certain Credits After Disallowance)
• Your EITC may be blocked for a period of time if the IRS found fraud or reckless disregard in a prior year

What the IRS Usually Checks for EITC

When the IRS reviews an EITC claim, it typically focuses on three major areas:

1. Qualifying Child Rules (If You Claimed Children)

To claim a qualifying child for EITC, the IRS looks at:

• Relationship: Is the child your son, daughter, stepchild, foster child, grandchild, sibling, or another allowed relative?
• Age: Generally under a certain age limit, or a full-time student, or permanently and totally disabled (check current IRS rules).
• Residency: Did the child live with you in the United States for more than half of the year?
• Filing Status: Are you using a status that allows EITC (for example, Married Filing Separately usually does not qualify)?

2. Earned Income and Investment Income

The IRS will check:

• Whether you have earned income (such as wages, tips, self-employment income)
• Whether your investment income is under the yearly limit
• That your income is within the EITC income limits for your filing status and number of children

3. Valid Social Security Numbers

For EITC, the IRS generally requires:

• Valid Social Security numbers (SSNs) for you, your spouse (if filing jointly), and any qualifying children you claim for the credit
• SSNs must typically be valid for work and issued by the due date of the return (including extensions)

Documents To Gather If Your EITC Is Reviewed

If the IRS questions your EITC, you will usually receive a notice letter explaining what they need. Common types of documents include:

Proof of Relationship and Residency (For Qualifying Children)

Examples:

• Birth certificates showing your name as parent
• Adoption papers or legal guardianship documents
• School records with the child’s name, your name, and your address
• Medical records or immunization records with matching address
• Daycare records listing you as the contact person and your address
• Lease agreements or housing authority letters listing household members
• Letters from social service agencies, shelters, or community organizations confirming residency

These records often need to show:

• The child’s name
• Your name (or your spouse’s name)
• Address
• Dates covering the tax year in question

Proof of Income

Examples:

• W-2 forms from employers
• 1099 forms (1099-NEC, 1099-MISC, etc.) for contract or gig work
• Pay stubs covering the year
• Business records if self-employed (invoices, receipts, mileage logs, bank statements)
• Bank statements showing deposits from work or business activities

Identity and Filing Status

Examples:

• Photo ID (driver’s license, state ID, etc.)
• Social Security cards (or SSA documents) for you, spouse, and children
• Marriage certificate or divorce decree
• Custody agreements or court orders (if relevant)

Quick Reference: Common EITC Review Triggers and Helpful Documents

What Happens After the IRS Selects Your EITC for Review

The exact steps can vary, but many people experience a process like this:

Step 1: IRS Sends a Letter or Notice

You may receive:

• A notice explaining that your EITC is being reviewed
• A list of documents they want
• A deadline for responding (often 30 days, sometimes longer)

Important:

• Open all mail from the IRS promptly
• Look for the notice number (often begins with CP or Letter) in the upper corner; you’ll need this if you call

Step 2: Your Refund Is Delayed or Adjusted

While the EITC is under review, the IRS may:

• Delay sending your refund, or
• Send a smaller refund without the EITC portion, pending your response

Your online refund status (such as the IRS “Where’s My Refund?” tool) may show a delay or special message.

Step 3: You Send Documents Back

You generally have several options to respond:

• Mail copies of documents to the address listed on the notice
• Fax documents to the number in the letter (if offered)
• In some cases, use an IRS online portal to upload documents (if the notice provides instructions)

Tips:

• Send copies, not originals
• Keep a full copy of everything you send
• Use tracking or certified mail if mailing, so you have proof of delivery

Step 4: IRS Reviews Your Response

The IRS will:

• Review your documents
• Possibly ask for additional information if something is missing
• Eventually send another notice with the outcome

Possible results:

• EITC allowed as filed (you keep the credit)
• EITC adjusted (reduced amount)
• EITC denied (removed from your return, which may create a balance due)

Step 5: You May Have Appeal Rights

If you disagree with the decision, the notice usually explains:

• How to request an appeal or reconsideration
• Deadlines for responding
• Whether you can contact the IRS Office of Appeals

It is often helpful to consult a tax professional or a Low Income Taxpayer Clinic if you are facing denial and are unsure how to proceed.

How To Prepare in Advance: Records That Help Avoid EITC Problems

You cannot control whether the IRS selects your return for review, but you can be ready with strong records. Good preparation can:

• Make it easier to prove your eligibility
• Shorten the time needed to resolve an issue

Here are practical steps:

1. Keep Year-Round Proof of Where Children Live

If you claim EITC with children, try to maintain:

• School records updated with your current address and contact information
• Medical or clinic records for your children with your address
• Daycare or after-school program records listing you as the responsible adult
• Copies of leases, housing vouchers, or landlord letters listing the people who live there

Organizing these by tax year makes them easier to find later.

2. Keep Clear Income Records

For employees:

• Save all W-2s and year-end pay stubs
• Verify that your name and SSN are correct with your employer

For self-employed or gig workers:

• Maintain a simple income and expense log
• Keep receipts, invoices, and bank statements
• Track mileage logs if you drive for income

3. Keep Legal and Custody Documents Handy

In cases with shared custody or complex family situations, keep:

• Custody orders or parenting plans
• Divorce decrees
• Written agreements about who will claim the child, if applicable (even if the IRS has its own rules, these documents can clarify your role and your child’s living situation)

4. Use Official Tools or Qualified Help To File

When filing your taxes and claiming EITC, consider:

• Using official IRS free filing options if you qualify
• Seeking help from Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs, which are usually run by approved community organizations
• Checking that your tax preparer is reputable, transparent about fees, and gives you a copy of your return

If Your EITC Is Denied: What You Can Usually Expect

If the IRS denies your EITC after a review, they will generally send a notice explaining:

• Why the EITC was reduced or denied
• Any change to your tax due or refund
• Whether you’re barred from claiming EITC for a certain number of years
• How to appeal or ask for reconsideration

Possible consequences:

• You may owe additional tax, plus possible interest.
• In cases of reckless or fraudulent claims, the IRS can ban EITC for future years.
• You may be required to file Form 8862 before claiming EITC again.

If you believe the IRS is wrong:

1. Read the notice carefully.
2. Prepare additional documents that support your position.
3. Follow the appeal or reconsideration instructions in the letter.
4. Consider asking for help from:
   • A qualified tax professional
   • A Low Income Taxpayer Clinic (LITC) in your area
   • A legal aid organization that handles tax issues

How To Verify You’re Dealing With the Real IRS (Not a Scam)

Because EITC refunds can be large, some scammers pretend to be from the IRS. To protect yourself:

• The IRS typically contacts first by mail, not by text, social media, or aggressive phone calls.
• If someone calls demanding immediate payment by gift card, wire, or prepaid card, it is very likely a scam.
• Real IRS letters include:
  • An official IRS logo
  • A notice number
  • Instructions to respond to an IRS address or phone number

If you are unsure:

1. Look up the official IRS phone number yourself (not from an email or text) and call to confirm the notice.
2. You can also contact 211 or a local legal aid or community tax clinic to ask where to get safe, official help.

Remember: HowToGetAssistance.org does not handle IRS accounts, does not contact the IRS for you, and cannot check your refund status. All official actions must go through the IRS or a trusted tax professional.

Where To Turn for Help with EITC Audits and Questions

If you are facing an EITC review or audit and feel overwhelmed, you may consider:

• IRS phone assistance: Use the phone number listed on your IRS notice for questions about that specific case.
• Volunteer Income Tax Assistance (VITA): Community-based programs that help many low- to moderate-income taxpayers prepare and understand returns, often at no cost.
• Tax Counseling for the Elderly (TCE): Focused on people aged 60 or older, often through community groups.
• Low Income Taxpayer Clinics (LITC): Independent organizations that help eligible taxpayers with IRS disputes and appeals at little or no cost.
• Local legal aid organizations: Some legal aid offices handle tax controversy matters, especially for lower-income clients.

You can usually find these resources by:

• Calling 211 and asking for tax help or Low Income Taxpayer Clinics
• Checking your local community action agency, United Way, or similar nonprofit offices
• Contacting your state or county human services office and asking for referrals to free or low-cost tax help

Understanding how EITC reviews and audits work can reduce stress and help you respond effectively. Keeping good records, opening IRS mail promptly, and seeking reputable help when needed are key steps you can take as you work through the process directly with the IRS or with qualified assistance.