Oops! IRS Letter to Taxpayers Contains Misinformation

The IRS has issued a news release indicating that 286,000 letters were sent to people who claimed the Earned Income Tax Credit on their 1999 tax returns raising questions about whether these people were entitled to claim the credit.

The letter contained some misinformation about where taxpayers should call to resolve child custody issues. The letter mistakenly directed taxpayers to contact state revenue agencies. Instead, taxpayers with questions about the Earned Income Tax Credit should contact the IRS at 1-800-829-1040.

The reason for the letter was to ask taxpayers to review the rules for the Earned Income Tax Credit to make sure they had correctly claimed the credit. In particular, the IRS wants to point out to these people that any child who makes a taxpayer eligible to claim the Earned Income Tax Credit must have lived with the taxpayer for more than six months during 1999.

Taxpayers who claimed the EITC in error are encouraged to amend their tax returns and remove the credit claim.

All recipients of the original letter should expect a new letter soon, reiterating the IRS concerns and providing the correct telephone number for contacting the IRS.

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