The CP75 Notice is sent by the IRS to inform taxpayers that they need to provide additional documentation to verify their eligibility for the Earned Income Credit (EIC). The EIC is a refundable tax credit aimed at helping low- to moderate-income working individuals and families. However, before granting the credit, the IRS may request proof of eligibility to ensure that the taxpayer meets the necessary requirements.
Key details of the CP75 Notice:
- Request for Documentation: The notice will specify the documents that the taxpayer needs to provide to verify their eligibility for the EIC. This may include income verification (such as W-2s or 1099s), proof of dependents (birth certificates, school records), and residency documentation.
- Impact on Refund: The EIC can significantly increase a taxpayer’s refund, but the IRS will not issue the refund until the requested documentation is received and reviewed. If the taxpayer does not provide the necessary information, the IRS may disallow the credit.
- Deadline for Response: The CP75 will include a deadline by which the taxpayer must submit the requested documentation. Failure to meet this deadline could result in the denial of the credit, and the taxpayer may owe additional taxes or receive a reduced refund.
- Dispute Process: If the taxpayer believes the IRS made an error in requesting the documentation, they can contact the IRS to discuss the situation or provide an explanation of why they believe they qualify for the credit.
The CP75 Notice is an important step in the verification process for the EIC, and responding promptly can prevent delays in receiving the refund.