The CP 79 is sent by the IRS to notify the taxpayer that they will need to complete another form (Form 8862) to claim the Earned Income Credit on a future tax return. This is generally caused by the taxpayer being disallowed or receiving a reduced Earned Income Credit.
Form 8862 can be completed using TaxAct®. The IRS may also contact the taxpayer after receiving the Form 8862 to request any documentation it requires to issue the Earned Income Credit.
Sections of the Notice:
- Header Section
This area contains the Notice Number, the notice date, your Social Security Number, and the IRS contact number.
- Explanation Section
Explains that the IRS has denied the claim for the EIC for your tax return. To claim the credit on future tax returns you are required to complete a Form 8862 and possibly provide other documentation to establish the right to claim the credit for a qualifying child or children.
This section also directs the taxpayer to IRS Publication 596 Earned Income Credit for the eligibility rules and warns of the consequences of disregarding the rules, including a possible 2 to 10 year ban from claiming the credit in the future.
- Response Section
There is nothing to be done at the time of receiving the notice.
Complete the required form the next time the Earned Income Tax Credit is claimed for a qualifying child or children.
Sample CP 79: