The Taxpayer Advocate Service has published an article, “NTA Blog: EITC Audits Will Once Again Begin; Proactively Responding to an EITC Audit Is Crucial”. The article begins as follows:
The Earned Income Tax Credit (EITC) is a refundable credit for low- and moderate-income working individuals and families based on their earned income. EITC significantly reduces poverty, with children constituting over half of the individuals it lifts out of poverty. The amount of the credit increases as earnings increase, reaches a plateau, and then falls as earnings increase. As of December 2021, 25 million workers and families got about $60 billion in EITC benefits. The average amount of EITC received nationwide was about $2,411. Congress provided this credit for individuals and families to be able to afford their day-to-day living expenses. Claiming EITC can be complicated and may involve filing an additional tax form, which leads to errors of both over and underpayment. As I’ve noted in recent blogs (here and here), the American Rescue Plan Act of 2021 (ARPA) temporarily increased the amount of EITC available to eligible taxpayers and expanded the pool of eligible taxpayers. The IRS recently published frequently asked questions about the tax year 2021 EITC.
To view the full article, click: “NTA Blog: EITC Audits Will Once Again Begin; Proactively Responding to an EITC Audit Is Crucial”
Posted by Mallory Wentz, Associate Editor, Wealth Strategies Journal.