Don't Fear the Audit: Why Taxpayers Should Respond to IRS Earned Income Tax Credit (EITC) Letter Audits

The EITC is a federal tax credit for low-to-moderate income taxpayers that helps to offset some of the costs of earning income. This credit can result in a significant refund for taxpayers who are eligible (potentially as high as $6,935).

Every year, the Internal Revenue Service (IRS) sends out letters to taxpayers as part of its efforts to verify the accuracy of Earned Income Tax Credit (EITC) claims. Unfortunately, nearly half of letter recipients do not respond, losing out on benefits they are entitled to due to fear of the IRS. As a result, the IRS is once again proactively auditing EITC claims to ensure that taxpayers receive the benefits they deserve. You, as a taxpayer, need to remember two key details: 1) the IRS IS NOT automatically correct that you don’t deserve your tax credit; and 2) you need to respond to IRS letters.

According to the National Taxpayer Advocate, many taxpayers are intimidated by the prospect of an IRS audit and fail to respond out of fear. This is a shame, as data shows that those who respond to an EITC audit are likely to receive more benefits than they initially claimed. In 2018, the average EITC refund for taxpayers whose incomes were less than $50,000 was $2,455. Taxpayers, including self-employed people and parents, are losing money because of fear caused by an IRS letter.

Responding to an EITC credit letter audit is crucial in order to receive the benefits that you deserve. At Safeguard Law, PLLC, we understand the fear and uncertainty that comes with receiving an IRS letter. That is why you need an experienced tax attorney in your corner to navigate the audit process and receive the money you deserve.