Topic Number 654 - Understanding Your CP75 or CP75A Notice Request for Supporting Documentation

You received this notice because the IRS is auditing your return. We're asking for information. You must send in the documents needed to close your audit.

Please don't ignore this notice. It's very important that we hear from you by the date shown on your notice. If you need more time to get all the requested information, please call the number on your notice to let us know. Also, it's important that we can contact you during the audit. If you move or change your phone number, please let us know by calling the toll-free number on the notice or faxing the response part of your notice. The fax number is shown on your notice.

This notice tells you what items on your tax return the IRS is auditing. We've also included other forms or publications that have important information about what you must send us and about what you need to know about your rights during an audit and more. We'll walk you through each step of what to do and when to refer to the other documents. It's helpful to have a copy of your tax return when you're going through this notice.

Before we begin, here are some important tips:

  • At the top of the notice on the right side, we list the tax year that we're auditing. When we use the term tax year, we mean that year.
  • Any documents you send in need to cover the year we're auditing.
  • Don't send original documents. Send us copies.

 

Earned Income Credit

The first item listed is the earned income credit. Your package includes a Form 886-H-EIC that lists all the different documents you can send to prove you may claim the EIC with one or more qualifying children. You can send any combination of these documents to provide the information we need. Look at the Schedule EIC you filed with your tax return and complete the following steps for each qualifying child listed:

  • First, you must prove you lived with your child in the U.S. for more than half the tax year:
    • If your child lived with you at the address shown on your notice, you need to send a document showing your child lived at that same address for more than half the tax year. For example: you could send copies of school records for your child that have your name and show the child's address. The dates on the document must be for more than half the tax year (for school records you may need more than one semester to show more than half the year).
    • If you moved and you and your child lived at another address, you must send documents showing the same address for both of you for more than half the tax year.
    • If your child didn't go to school, you can send in copies of medical records or a statement from a daycare provider.
    • If you need to get a statement from your child's school, daycare or medical care provider, you can find templates here. Your school or provider can copy and paste the template to their letterhead to make sure all the required information is provided.
    • Don't forget to use the Form 886-H-EIC for more examples of documents you can send.
    • If you can't prove your child lived with you for more than half the tax year, you don't qualify for the EIC.
  • Second, you must prove how you're related to the child. The child must be related to you in one of the ways listed on the Form 886-H-EIC. The form gives examples of what to send to prove how you're related.
  • Third, if your child is age 19 years old or over, you must show either:
    • Your child was under age 24 and a full-time student for at least five months of the tax year (you can do this by sending copies of official school records), or
    • Your child is permanently and totally disabled by sending a copy of one of the official documents shown on Form 886-H-EIC.

 

You can only claim the earned income tax credit if your child lived with you for more than half the tax year in the United States, your child is related to you in one of the ways listed on the Form 886-H-EIC, and your child was an eligible age. Your child must meet all three of these requirements to qualify you for the credit. If you can't show that your child meets all three of these requirements, you may still be eligible for the credit without a qualifying child.

Dependents

The next item is your claim of dependents. Your dependents are listed in the middle of the first page of your tax return. The Form 886-H-DEP section for your qualifying child lists all the documents or combination of documents you can use to prove you can claim each child listed as your dependent. To claim a child as a dependent qualifying child, the child must have lived with you for more than half the tax year (the residency test), be related to you (the relationship test), be a certain age (the age test), and not have provided over half of his or her own support (the support test).

  • If each child listed on your Schedule EIC is the same one you claimed as a dependent, you can use the same documents you use to prove you may claim the EIC to prove the child met the tests for a dependent qualifying child. You don't have to send in copies of the same documents or look for different ones. But, you must look at the Form 886-H-DEP to see if the child meets the support test.
  • Support Test
    • To meet the support test, the child can't pay more than half of his or her own support.
    • You don't need to send proof of support at this time.

 

If you received this CP75 notice, you claimed your child as a dependent qualifying child. If you find your child doesn't meet the rules to be your qualifying child, you may be able to claim the child as a dependent qualifying relative. See the rules on the Form 886-H-DEP for a qualifying relative. If the child meets the rules, you need to send the documents listed on the Form 886-H-DEP for a qualifying relative.

Filing Status

The next item listed is filing status. Look at the first page of your tax return (below your name and address) for your filing status.

If you filed as head of household, you need to look at the Form 886-H-HOH that lists all the different documents or combination of documents you can send to prove that you may claim this filing status.

To file as head of household, you must pass three tests: the marriage test, the qualifying person test, and the cost of keeping up a home test.

 

  • First, you must meet the marriage test:
    • If you were never married or you're a widow or widower, don't submit anything for the marriage test. Only submit documents for the qualifying person and cost of keeping up a home tests.
    • You can't be married and living with your spouse and claim head of household filing status, unless your spouse was a nonresident alien at any time during the tax year.
    • If you're still married and lived with your spouse at any time during the last six months of the year, you can't file as head of household, unless your spouse was a nonresident alien at any time during the tax year. Instead, you must file either as married filing jointly or married filing separately.
    • If you were divorced or legally separated by December 31 of the tax year shown on your notice, you must send a copy of your divorce decree or separation papers.
    • If you're still married but lived apart for the last six months of the tax year shown on your notice, you must send us documents, such as a copy of a lease agreement, showing you and your spouse lived at different addresses.
  • Next is the qualifying person test: The documents you send for the EIC and your claim of dependents show you met this test. So, you don't have to send us any more documents for this test.
  • Third is the cost of keeping up a home test:
    • If you didn't meet both the marriage and the qualifying person tests, you can't file as head of household.
    • If you met both the marriage and the qualifying person tests, you must send documents showing you paid more than half the cost of keeping up the home that the qualifying person and you lived in for more than half the tax year. You must send us documents showing you paid more than half the household expenses, such as rent, utilities, groceries, repairs and maintenance. If the qualifying person was your parent, you did not have to live with your parent but you have to prove that you paid more than half of the cost of maintaining a home for your parent for the entire tax year.
    • If any other filing status box other than head of household is checked, you don't have to send anything in to prove your filing status.

 

American Opportunity Credit

The next section is the American opportunity credit. If you claimed this credit, you must complete Form 8863.pdf, Education Credits, and send it with your tax return. Also, look for one or two entries on the second page of your tax return for the lines listing "Education credits" or "American opportunity credit." If your tax return shows you didn't claim the credit, you don't need to send documents to prove this credit.

If you claimed this credit, the student claimed on your Form 8863 should have received a Form 1098-T.pdf, Tuition Statement. Schools must send this form to all eligible students unless an exception applies. If the student didn't receive this form and is eligible for the AOTC, contact the school for the form.

If you received payments for education expenses from your employer, veterans' educational assistance, or other benefits, you can't claim these same expenses for this tax credit. You have to subtract the expenses paid by these payments and benefits from your total tuition and other eligible expenses.

  • If you claimed an education credit, we need proof that each student listed on the Form 8863 is eligible. The Form 1098-T has the amount of qualified education expenses paid or billed in boxes 1 or 2. We need a copy of that form.
  • If you had more expenses than the amounts listed in boxes 1 or 2 of the Form 1098-T, we need cancelled checks or receipts for fees, books, and supplies needed for the course or courses.

 

If You Have Additional Items Listed

Your notice may have more items listed, such as the Premium Tax Credit or Schedule C. First, let's cover other important information you need to know.

If We Don't Hear From You

Make sure you mail or fax all the necessary documents by the date in this section. If you need more time to get all the documents ready, call us at the number listed on the top right part of the page.

But, if you review your return and your notice and realize you didn't qualify for any of the items shown on your notice, don't send anything. We'll get back to you with an examination report after the deadline shown on your notice.

Response Form

The last part of the notice is the response form. If you have documents proving you may claim one or more of the items listed, you need to complete the response form and either:

  • Fax the completed response form to us with copies of the records, documents, and statements toll-free to the fax number on your notice.
  • Return the completed response form to us with copies of the records, documents, and statements in the return envelope in your packet or to the address shown on the notice.

 

After We Receive Your Information

It takes at least 30 days to review the documents you send us. You don't need to do anything until you hear from us.

If you sent us copies of documents that prove you're eligible for items you claimed on your tax return, we will send you a notice to let you know your audit is closed.

If the documents you send don't give us the information we need or only prove some of the items, we will send you an audit report. The report will explain our proposed changes and show the amount of tax you owe or the corrected amount of any refund you may receive.

If we hold your refund, you should get your refund in eight weeks if you don't owe other taxes or debts we're required to collect.

Your Rights During an Audit

 

  • Your packet includes Publication 3498-A.pdf, The Examination Process (Audits by Mail). This publication covers what happens during an audit, your rights during the audit, and your rights to appeal the results of the audit. It also lists more resources to help you.
  • Your packet also includes Publication 4134.pdf, Low Income Taxpayer Clinic List. Low-income taxpayer clinics (LITCs) aren't part of the IRS, but an LITC may help you with an audit, an appeal, or collection issue for free or for a small fee.

 

Where to Get More Help

We also list on the notice important numbers and websites you can use if you need more help. You can find this information under the additional information heading. Also, you can:

  • Get a transcript of the information on your tax return online.
  • Visit IRS.gov/eitc for:
    • More information you need about the EIC and links to other topics discussed here
    • If you're not sure you qualified for the EIC, or will qualify this year, or what your filing status is this year, find the link to the EITC Assistant on IRS.gov/eitc

 

Additional Items on Your Notice

Schedule C

If your notice lists Form 1040, Schedule C.pdf income, look at Form 11652, Questionnaire and Supporting Documentation, Form 1040 Schedule C (Profit or Loss from Business). It lists the documents you must send to prove your income and expenses. Please review each line of this form and make sure you answer every question. Return the Form 11652 with the requested supporting documents, such as copies of your business records, Form 1099-MISC.pdf, and your business license.

We don't require that you keep records in any special manner in most cases, but you must keep all documents you use to complete your tax return. You must keep records supporting the income, expenses, deductions or credits you claim, such as invoices, receipts, mileage logs, and checking account statements showing amounts paid, and any other proofs of payment. You need to keep well-organized records to answer any questions when your return is selected for audit. And, you need to keep the records supporting items on your tax returns for at least three years after filing your return.

You must send copies of your records that show you earned the income claimed on your Schedule C. You must send enough copies of your records and documents to prove you ran your business during the tax year under audit, such as documents that show your gross receipts and expenses. You must report all your income and all your expenses. You can't choose not to take any expenses or to claim only some of the expenses.

  • Gross receipts are the income from your business and proof of your gross receipts includes cash register tapes, bank deposit slips, receipt books, invoices, credit card charge slips, and Forms 1099-MISC.
  • Expenses are the costs paid to carry on your business and proof of your expenses includes canceled checks or checking account statements clearly showing the expenses paid, cash register tapes, account statements, credit card sales slips, and invoices.

 

After you complete your response, please look at the Form 11652 to make sure you included all the necessary information.

If you need additional information about recordkeeping, see Publication 583, Starting a Business and Keeping Records.

Premium Tax Credit

If your notice lists the Premium Tax Credit (PTC), look at the Form 14950.pdf, Premium Tax Credit Verification. This form lists what document or documents you need to submit to prove you qualify for this credit.

You must have health insurance through an exchange or marketplace to claim this credit. If you didn't get your health insurance through an exchange or marketplace, you're not eligible for the PTC and you don't need to send any information to prove this credit.

If you bought your insurance through an exchange or marketplace, you must send copies of documents to support any entries you have on Part 4, Allocation of Policy Amounts, or Part 5, Alternative Calculation for Year of Marriage, on your Form 8962.pdf, Premium Tax Credit (PTC). We need a document with a list showing whom your plan covers. This list is on your insurance enrollment form or on a statement from your insurance provider. If you paid insurance premiums, submit the proof of payment. This proof can be paid receipts, credit card statements, bank statements showing who was paid, or copies of both sides of your cancelled checks.

You also must submit a copy of your Form 1095-A.pdf, Health Insurance Marketplace Statement. If you didn't receive this form or you didn't keep it, contact your plan administrator.