How Long Does the EITC Audit Process Take?

An audit of your Earned Income Tax Credit (EITC) claim can introduce uncertainty about your expected tax refund. The primary concern for most people is the duration of this review process. These examinations are a regular part of the IRS’s procedures to ensure credits are issued correctly. An EITC audit is simply a request for more information to verify your eligibility for the credit you claimed on your tax return.

The Initial Audit Notice and Required Information

An EITC claim is often selected for audit when IRS records indicate a potential discrepancy. The most frequent issues revolve around the definition of a “qualifying child,” which requires meeting specific relationship, age, and residency tests. For instance, the IRS may need to confirm that a child lived with you for more than half of the tax year or that they meet the age requirements. Another common trigger is when income reported on the return does not match information provided to the IRS by employers or clients.

The first official communication you will receive is a letter, often a CP75 notice, which begins the audit process. This notice will state that your tax return is under review and that the portion of your refund attributable to the EITC is being held until the examination is complete. The letter’s primary purpose is to request specific documents to verify your eligibility, and the IRS provides Form 886-H-EIC as a guide for what to send.

To prove your relationship to a qualifying child, you will need documents like birth certificates or adoption records. For residency verification, the IRS accepts items such as school or medical records, landlord statements, or official letters addressed to the child at your address. To validate income and financial support, you should collect pay stubs, W-2s, and detailed business records if you are self-employed.

The Audit Response and Review Process

You can send your documents by mail or fax to the address or number provided in your audit notice. An online portal may be available for secure electronic submission. It is important to send copies of your documents, not the originals, and to keep a record of what you sent and when.

The process can be lengthy, often taking many months and sometimes over a year to be fully resolved. Delays can occur due to IRS backlogs, complexities of your case, or if the information you provided is incomplete, prompting further correspondence.

During this waiting period, you will receive official notifications about your audit by mail. While you can use the “Where’s My Refund?” tool on the IRS website to see if your return is still under review, the information provided there may be limited during an active audit.

Receiving the Audit Determination

Upon completing its review, the IRS will send a letter detailing its findings. There are three potential outcomes. The most favorable result is that your claim is accepted as filed. The IRS has determined your documentation fully supports your EITC eligibility, and the hold on your refund will be released. However, it can still take several more months for you to receive the payment.

A second possibility is that your claim is adjusted. This means the IRS has determined you are eligible for the EITC, but for a different amount than you originally claimed. The notice you receive will explain the specific changes made, the new credit amount, and the resulting impact on your refund or balance due.

The third outcome is a full disallowance of your claim. The determination letter will outline the reasons for the denial and calculate your new tax liability. This new amount will likely include the disallowed credit, potential penalties, and interest accrued on the unpaid tax.

Post-Determination Options

If you receive an audit determination that adjusts or disallows your EITC claim and you disagree with the outcome, you have the right to challenge the IRS’s decision. The first step in this process is to request an appeal with the IRS Independent Office of Appeals. This office is separate from the audit division and provides a fresh, impartial review of your case.

To initiate an appeal, you must follow the instructions provided in your determination letter, which involves submitting a formal protest. This document outlines the specific points of the audit report with which you disagree and the reasons for your position. The appeals process is designed to resolve tax disputes without going to court and often results in a settlement.

Should you remain unsatisfied with the outcome of your appeal, you may have the right to take your case to the U.S. Tax Court. This involves filing a formal petition within 90 days from the date of the final determination letter from the Office of Appeals.