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Part 4. Examining Process

Chapter 22. National Research Program (NRP)

Section 8. NRP EITC Component of the Individual Reporting Compliance Study

4.22.8  NRP EITC Component of the Individual Reporting Compliance Study

4.22.8.1  (04-25-2008)
Overview

  1. This section provides guidelines for the Earned Income Tax Credit (EITC) component of the NRP individual study.

4.22.8.2  (04-25-2008)
Background

  1. Beginning with TY 2006, NRP introduced a new design for its individual reporting compliance study. This new design consists of smaller annual samples which will be combined into three-year cycles for analysis. The first cycle under the new design will include a special EITC component.

  2. Special programs conducted by the IRS during the 1990s provided detailed information about EITC compliance. In addition to the standard information about the amount of EITC claimed on a tax return and the amount allowed per exam, these programs were designed to gather comprehensive information on all the EITC eligibility criteria for each return in the program. Analysis of the data collected as part of these programs improved the Service’s understanding of EITC compliance. Information and analysis from these studies were used in the development of the IRS’s strategy for improving administration of the EITC.

  3. More current detailed information is needed. Since the last EITC compliance study (TY 1999), several legislative changes affecting the EITC were enacted. It is therefore possible that the earlier information is outdated. The IRS also needs more current information to satisfy the requirements of the Improper Payments Information Act (IPIA) of 2002 (Public Law 107-300) for measuring and reducing improper payments.

  4. Rather than establishing a separate program to obtain these data, the IRS is taking advantage of efficiencies of a combined program by incorporating the EITC objectives into the existing National Research Program individual reporting compliance study.

4.22.8.3  (04-25-2008)
EITC Component

  1. EITC will be a mandatory issue for all NRP cases where EITC is claimed.

  2. The guidelines contained in this section are designed to ensure thoroughness and uniformity in the audit of the EITC issue. Adherence to these guidelines is necessary for achieving the analytical objectives of the NRP.

  3. Each examiner assigned EITC component cases must successfully complete the NRP EITC component training module prior to auditing the cases.

  4. This section is intended primarily for cases where EITC is claimed. However, these guidelines also should be followed for cases where EITC was not claimed but is established during the examination.

  5. All audits will be face-to-face examinations and ideally will include at least one meeting with the taxpayer. Exceptions from the requirement of a face-to-face examination will be considered in unusual circumstances and must be approved in writing by the Group Manager and documented in the case file.

  6. Every effort should be made to encourage a taxpayer to appear for the audit. Subject to manager approval, an examiner should make a reasonable effort to accommodate a taxpayer who may not be able to meet during regular business hours.

4.22.8.4  (10-01-2008)
Supplemental Questionnaire: EITC Data Collection Instrument

  1. On all TY 2006 NRP cases, an internet-based supplemental data collection instrument (DCI), called the Supplemental Questionnaire, will be used to collect examination data needed for NRP-based analytical studies and currently not obtainable through NRP’s standard mechanism of using the EOAD conversion program to obtain RGS information. There are separate sections for EITC-related items.

  2. The examiner is expected to be familiar with the content of the DCI prior to beginning an examination.

  3. For each case, the examiner will accurately complete the relevant parts of the DCI. It should be completed concurrently with the examination and examination workpapers. The DCI application does not require all information to be entered at one time. Instead, it can be completed over several sessions with partial information added, and corrections made, at any time.

  4. Beginning with TY 2007, RGS leadsheets and workbook applications will replace the NRP Supplemental Questionnaire as the mechanism for gathering additional information for NRP-based analytical studies. For each EITC case, the examiner will accurately complete the relevant leadsheets and workbooks. The EITC leadsheet and workbook will be mandatory for NRP EITC cases.

4.22.8.5  (10-01-2008)
Case Building Material Pertinent to EITC

  1. Certain case building material is especially pertinent to EITC. This material provides information useful to the examiner both for understanding the EITC claim and for substantiating that the taxpayer meets certain EITC eligibility criteria. In auditing the EITC issue, the examiner should make use of all relevant case building material provided with the case file and obtain additional case building material as warranted.

  2. The following case building material should be included in the case file as part of the NRP case building process:

    1. RTVUE

    2. DDBOL

    3. DDBKD

    4. IMFOLE

  3. If any of this information is not in the case file, the examiner should follow local procedures to obtain the missing information.

  4. Prior to conducting the pre-contact analysis, the examiner should follow local procedures to obtain the following additional case building information:

    1. DUPOL for the primary and secondary taxpayers and EITC child(ren).

  5. The examiner also should obtain Numident (MFTRA-U) information for the primary and secondary taxpayers and EITC child(ren) if warranted.

4.22.8.6  (04-25-2008)
Pre-contact Analysis and Examination Guidelines

  1. This section provides guidelines for conducting pre-contact analysis and examinations of NRP EITC cases.

4.22.8.6.1  (04-25-2008)
Pre-contact Analysis

  1. The objective of the pre-contact analysis is to plan the EITC part of the examination by:

    • identifying and understanding any changes made to the return during processing that affected the EITC,

    • identifying and understanding adjustments and amended return filings made subsequent to filing but prior to the examination that affect the EITC,

    • identifying case building information that may be used in lieu of taxpayer provided documentation to corroborate that a taxpayer satisfies an EITC eligibility rule,

    • determining the information and documents to request from the taxpayer, and

    • preparing the EITC-related questions that will be part of the initial interview.

  2. A thorough pre-contact analysis of EITC-related case building information is essential for cases involving EITC due to the nature of EITC-related mathematical and clerical error authority and the existence of various administrative programs involving EITC-many of which are conducted pre-refund. These activities may result in changes to a case between the time the return was originally filed and the time the return is assigned to the examiner.

  3. Any new examination issue arising from this review should be added to RGS.

4.22.8.6.1.1  (04-25-2008)
Math Error and Related Post-processing Adjustments

  1. The examiner should be alert for cases with post-processing adjustments related to taxpayer responses to math errors.

  2. For cases with these types of adjustments, the examiner needs to ensure the correctness of the per return RGS data and make changes as necessary. The examiner should also notify the NRP coordinator of the changes in the per return data.

4.22.8.6.1.2  (04-25-2008)
Amended Returns

  1. The examiner should be alert for changes to the EITC made on an amended return filed prior to the start of the examination.

  2. The examiner should follow standard NRP procedures for adjusting RGS per return data, incorporating the amended return into the examination, and providing a copy of the amended return to the NRP Coordinator.

  3. A case where EITC was not claimed on the original return but was claimed on an amended return will be treated as an EITC component case if the amended return was filed and processed prior to examination notification.

4.22.8.6.1.3  (04-25-2008)
EITC 2/10 Year Ban

  1. The examiner should always review case building material to identify taxpayers who are subject to an EITC ban to prevent allowing EITC to an ineligible taxpayer.

  2. For cases where there are indications that the taxpayer may be eligible for EITC but did not claim it, one of the first steps toward establishing EITC eligibility should be a check that the taxpayer is not subject to the ban.

4.22.8.6.1.4  (04-25-2008)
Recertification

  1. The requirement to recertify indicates that a taxpayer previously had EITC disallowed through deficiency procedures. As appropriate, the examiner should include this information in planning the examination, especially if it is relevant to imposing an EITC ban should EITC again be disallowed or reduced.

4.22.8.6.1.5  (04-25-2008)
Advance Payment of EITC

  1. Examiners should analyze the Forms W-2 data from the information return transcript and the return data to confirm that a taxpayer properly reported any advance payment of the EITC. If the advance payment of EITC was not previously classified, the examiner should add it to RGS if information from the Information Returns Master File (IRMF) suggests that advance payment of EITC was misreported.

4.22.8.6.2  (10-01-2008)
Examination Guidelines

  1. The examination of the EITC for the NRP EITC cases will be comprehensive, covering each of the EITC eligibility criteria.

  2. The examiner’s analysis and determination with respect to each of the criteria should be clearly and concisely documented in the workpapers. Beginning with TY 2007, the RGS EITC leadsheet and workbook applications will be mandatory for NRP EITC cases.

  3. For certain taxpayers and eligibility criteria, case building information alone may be sufficient to conclude that the taxpayer satisfies the eligibility criteria. The examiner will use the pre-contact analysis process to identify case building information that can be used in lieu of taxpayer provided documentation to substantiate that a taxpayer satisfies a particular EITC eligibility criteria. For these criteria, the examiner need not request additional documentation from the taxpayer unless there are indications that the case building information is incorrect or incomplete or the relevant material is not available for the taxpayer. Specific guidelines are provided in Exhibit 4.22.8-1 below.

  4. The examiner will follow existing procedures for establishing or removing an EITC recertification indicator, if applicable. Refer to IRM 4.19.14.5 for additional information.

  5. The examiner should assert penalties and the EITC 2/10 year bans as appropriate. The examiner should refer to IRM 4.19.14.5.1 and LEM 4.19.14.5.1.5 for guidelines for asserting and imposing the EITC 2/10 year ban.

  6. EITC eligibility and the amount of the credit are based on AGI, Earned Income, and Investment Income (Disqualified Income). For the NRP EITC component cases, the examiner will follow all existing examination guidelines pertinent to the income items that comprise these EITC income-related concepts. The examiner should pay particular attention to the guidelines related to minimum income probes and the NRP guidelines that emphasize the need for examiners to be especially alert to discovering unreported income. (Refer to IRM 4.10.4.3 and IRM 4.22.4.4.1 for additional information).

  7. The examiner should also be alert to discovering overreported income and misreported income items that may be relevant primarily to EITC, such as prisoner/inmate earnings, taxable scholarship or fellowship grants not reported on a Form W-2, and income related to clergy or church employees.

  8. The examiner should be alert to issues involving community property income with respect to AGI and earned income for EITC for married taxpayers qualifying for head of household filing status on returns where community property laws are relevant. Examiners should refer to IRM 25.18 for additional information about community property law.

  9. The eligibility criteria and the amount of the credit depend in part on the presence and number of EITC qualifying children. For each child claimed by the taxpayer as an EITC qualifying child, the examiner will determine whether the child satisfies each of the qualifying child rules. If the examiner determines that any of the children claimed by the taxpayer do not satisfy the rules to be an EITC qualifying child, the examiner will explore the EITC qualifying child eligibility of the taxpayer’s other children (if any). If the taxpayer has no other qualifying children, the examiner will determine whether the taxpayer is eligible for EITC without a qualifying child.

  10. The examiner should be mindful of indications that a taxpayer has underclaimed the EITC either by claiming the EITC without a qualifying child when she/he actually is eligible for the credit with a qualifying child or by claiming only one qualifying child when eligible to claim two.

  11. Although a qualifying child can be a qualifying child of more than one person, only one person can use the qualifying child to claim EITC. As part of the pre-contact planning process the examiner will obtain a current DUPOL for each qualifying child, and review the material to identify multiple claims using the same child and/or possible improper splitting of tax benefits.

  12. Filing Status is a mandatory issue for all NRP EITC component cases with head of household filing status. If the taxpayer used the head of household filing status and the issue was not classified, the examiner must add it as an issue.

  13. If the taxpayer used single, married filing jointly, or qualifying widow(er) filing status, filing status was not classified, but there are indications that the filing status used by the taxpayer is incorrect, the examiner will add filing status as an issue.

  14. For cases where a married taxpayer used an incorrect filing status and the correct filing status is either married filing jointly or married filing separately, the examiner should inform the taxpayer that it may be to his or her advantage to file jointly and outline the requirements to do so. Prior to adjusting the taxpayer’s filing status to married filing separately, the examiner should allow the taxpayer sufficient opportunity to elect to file jointly with his or her spouse.

  15. The examiner should be aware of common law marriage situations. See IRM Exhibit 25.15.7-1 for a common law marriage chart.

Exhibit 4.22.8-1  (10-01-2008)
Substantiating EITC Eligibility for NRP EITC Component Cases

EITC Criteria Condition Use of Case Building Information Document Request
Qualifying Child Rules
Relationship If the child is claimed as a    
  Son, Daughter (including adopted children), The examiner should attempt to corroborate this claim using relevant case building information as part of pre-contact planning activities. If relevant case building information is not available, contains conflicting information, or appears to be otherwise incorrect, request the child’s birth certificate.
  Child whose adoption is pending, → Request a letter from an authorized adoption agency.
  Foster child → Request a letter from an authorized placement agency or applicable court document.
  All other relationships → Request all birth certificates and marriage certificates that show this relationship.
Age If the child’s reported age was    
  Under age 19 The examiner should corroborate the age using relevant case building information as part of pre-contact planning activities. If relevant case building information is not available, contains conflicting information, or appears to be otherwise incorrect, request the child’s birth certificate.
  Age 19 through 23 The examiner should corroborate the age of the child using relevant case building information as part of the pre-contact planning activities. If relevant case building information is not available, contains conflicting information, or appears to be otherwise incorrect, request the child’s birth certificate.
  AND    
  claimed as a student → Request official school records that show the child was a full time student for at least 5 months during 2006 at an institution considered a school for EITC purposes.
  and/or    
  permanently and totally disabled → OR
Request a letter from the child’s doctor, other health care provider, or any social service program or agency verifying the child is permanently and totally disabled.
  Age 24 or over The examiner should corroborate the age of the child using relevant case building information as part of the pre-contact planning activities If relevant case building information is not available, contains conflicting information, or appears to be otherwise incorrect, request the child’s birth certificate.
  and    
  permanently and totally disabled → Request a letter from the child’s doctor, other health care provider, or any social service program or agency verifying the child is permanently and totally disabled.
Residency All cases with qualifying children → Request, for all NRP EITC component cases involving qualifying children, documentation of the joint residency of the taxpayer and child in the US for more than half of 2006. The request should emphasize that the taxpayer can provide any combination of documents that show, when taken altogether, that the taxpayer and child lived together for more than half the year. The documents need to show a name, address, and date and the combination of documents provided need to show that the child and the taxpayer lived at the same location(s) for the relevant time periods.
SSNs Valid for EITC
Qualifying Child SSN All cases with qualifying children    
SSN issued by the Social Security Administration   The examiner should use case building material to corroborate that the child has an SSN issued by the Social Security Administration. If relevant case building information is not available, contains conflicting information, or appears to be otherwise incorrect, request the child’s Social Security Card.
AND      
SSN not issued for the sole purpose of obtaining a federally funded benefit: "Valid for Employment SSN" If the case building citizenship indicator is A= US Citizen or B= Legal Alien-Authorized to Work. E= Alien Student -Restricted Work Authorized. When applicable, use the citizenship code to determine the SSN is valid for EITC. Citizenship codes of A,B, and E are valid for EITC. If there is an indication that the SSN does not belong to the particular child, request the Social Security Card of the child as part of the Document Request.
  All other citizenship codes. → Request that the taxpayer bring the child’s Social Security Card to the examination. The taxpayer also should be informed that if the card contains the legend "Not Valid for Employment" and the child’s immigration status has changed entitling the child to a card without the legend, the taxpayer should obtain a new card from the Social Security Administration prior to the appointment. If the child’s immigration status has not changed, the taxpayer should provide documentation that the SSN was issued for a purpose other than obtaining a federally funded benefit.
Taxpayer Must Have a Valid SSN All cases    
SSN issued by the Social Security Administration   The examiner should use case building material to corroborate that the taxpayer, and spouse if applicable, has an SSN issued by the Social Security Administration. If relevant case building information is not available, contains conflicting information, or appears to be otherwise incorrect, request the taxpayer’s Social Security Card.
AND      
SSN not issued for the sole purpose of obtaining a federally funded benefit: "Valid for Employment SSN." If the case building citizenship indicator is A= US Citizen B= Legal Alien-Authorized to Work, or E=Alien Student-Restricted Work Authorized When applicable, use the citizenship code to determine the SSN is valid for EITC. Citizenship codes of A,B and E are valid for EITC. If there is an indication that the SSN does not belong to the particular taxpayer, request the Social Security Card as part of the Document Request.
  All other citizenship codes. → Request that the taxpayer bring his/her Social Security Card to the examination. The taxpayer also should be informed that if the card contains the legend "Not Valid for Employment" and his/her immigration status has changed entitling him/her to a card without the legend, the taxpayer should obtain a new card from the Social Security Administration prior to the appointment. If the taxpayer’s immigration status has not changed, the taxpayer should provide documentation that the SSN was issued for a purpose other than obtaining a federally funded benefit.
US Citizen or Resident Alien all Year All cases When applicable, use the citizenship code to determine that the taxpayer is a US citizen  
  If the case building citizenship indicator is A= US Citizen Taxpayer is a US citizen  
  All other citizenship codes → Request documentation about residency to establish that the taxpayer and spouse were resident aliens for the year (accounting for the special rules for electing to treat a non-resident alien spouse as a resident alien).
Additional Criteria for EIC Without A Qualifying Child For (1) each case where EITC without a qualifying child was claimed or (2) each case where EITC with a qualifying child was claimed, the examiner determined that the taxpayer did not have any EITC qualifying children, and the examiner is analyzing whether the taxpayer is eligible for EITC without a qualifying child    
At Least 25 Years But Less Than 65 Years at the End of Tax Year All cases Use case building information to verify the taxpayer’s age. If the case building data on age is missing or appears to be incorrect, request the taxpayer’s birth certificate.
Cannot be the Dependent of Another Person All cases Use case building material to determine whether the taxpayer was claimed as a dependent on another return. Request sufficient information, either in the Document Request, initial interview, or other appropriate time to make a determination regarding whether the taxpayer is a dependent of another taxpayer .
Must Have Lived in the US for More Than Half the Year For cases where EITC without a qualifying child was claimed, → Request documentation of the residency of the taxpayer in the US for more than half of 2006. The request should note that the documentation must have a name, address, and date and that more than one document may be necessary to cover the required time period.
  For cases where EITC with a qualifying child was claimed but is being disallowed and the examiner is analyzing whether the taxpayer is entitled to EITC without a qualifying child, → Use documents previously provided by the taxpayer in support of the residency of the child and taxpayer or support for being a resident alien all year as appropriate, with additional documentation requested as needed.

Exhibit 4.22.8-2  (04-25-2008)
NRP Supplemental Questionnaire Part A: Completing Sections 1-5 and the Credits Section of the Data Collection Instrument (DCI)

ITEM INSTRUCTION
General Case Information Section
Item 1 Select "Yes" if this is a no show /no response case. Otherwise, select "No" .
Item 2a Select the response options that describe the type of return preparer. Choose all options that apply. Base your response on both the preparer information from the return and what the taxpayer/representative reports during the examination. If there is no paid preparer information on the return, base your response on information from the taxpayer/representative. Select "Unenrolled Preparer" for any paid preparer that does not fit into the other listed categories.
Item 2b Select "Yes" if the taxpayer/representative indicated that the return preparer was compensated. Otherwise, select "No" .
Item 2c If the preparer was compensated, select "Yes" if the paid preparer signed the return. If the paid preparer did not sign the return, select "No" .
Item 2d If the preparer was compensated, select "Yes" if the paid preparer entered an SSN/PTIN/EIN on the return. Otherwise, select "No" .
Item 3a Select "Yes" if the taxpayer was represented during the examination by a Power of Attorney with a valid Form 2848. Otherwise select "No" .
Item 3b From the available options, select the category of the Power of Attorney. Include "Enrolled Actuary" in the "Enrolled Agent" category and "Officer" in the "Employee of the Taxpayer" category.
Item 3c If the taxpayer was accompanied by anyone else who assisted the taxpayer during the examination, check the box(es) that characterize the individual(s). For married filing jointly taxpayers, do not include a spouse as another person when answering this question.
Item 4a Select "Yes" if the taxpayer filed a TY 2006 amended return that was processed by the IRS. Otherwise select "No" .
Item 4b Select "Yes" if the changes on the amended return required you to modify the RGS Return Setup and/or RGS per return fields. Otherwise select "No."
Item 4c Select "Yes" if the amended return was filed with the IRS prior to contact with the taxpayer about the examination. Otherwise select "No."
Item 5a Select "Yes" if the taxpayer contacted the IRS for assistance in preparing the tax return. Include accessing the IRS website as contacting the IRS for assistance.
Item 5b Select the tax topic(s) that prompted the taxpayer to seek assistance from the IRS. Select from the options provided and/or select "Other" and enter topics not listed. Select/indicate multiple topics if appropriate.
Item 5c Select the IRS resources that the taxpayer used to complete the return. Select from the options provided and/or select "Other" and enter the resource(s). Select/indicate multiple topics if appropriate.
Filing Status, Income, and Adjustment Issues
 
Item 1a Select "Yes" if the examination changed the taxpayer’s filing status from head of household to another filing status. Otherwise, select "No" .
Item 1b If the head of household filing status was disallowed, indicate which rules the taxpayer met or did not meet.
Item 2a If the taxpayer reported "Other Income," Form 1040, line 21 breaks out the reported amount into the following three categories: Net Operating Loss Deduction (NOLD), Gambling, and All Other. Enter whole dollar amounts only, no cents. Enter the negative sign for NOLD. Gambling includes lotteries, raffles, etc. The "Total" box reflects the sum of the numbers you enter in the three categories and should match the "Other" income line on the return.
Employment Tax Issues
Item 1a Select "Yes" if one or more Forms 1099 MISC for Non-Employee Compensation (NEC) was issued for the taxpayer. (For married filing jointly taxpayers, select "Yes" if a form was issued for either spouse.) Otherwise select "No" .
Item 1b Select "Yes" if the taxpayer included all amounts from the Form 1099 MISC with NEC on a Schedule C, C-EZ, or F. Select "No" if the taxpayer did not include all amounts on a Schedule C, C-EZ, or F and explain why in the box provided.
Item 1c Select "Yes" if the Form(s) were filed with the IRS. Otherwise select "No" .
Item 1d Select "Yes" if the taxpayer filed a Schedule SE that included the Form 1099 MISC-NEC income. Select "Not Required" if the taxpayer was not required to file a Schedule SE. Select "No" if the taxpayer was required to file a Schedule SE that included the Form 1099 MISC-NEC but did not. Indicate the reason in the box provided.
Item 1e Determine if the taxpayer’s most significant source of earned income was NEC income from one payer. For cases of married filing jointly taxpayers make a separate determination for each spouse. For taxpayers whose most significant source of income was NEC income from one payer, indicate whether the taxpayer qualifies for independent contractor status under worker classification rules as discussed in Publication 1779. Select "No NEC" if the individual had no NEC income. Select "NA, NEC was NOT the most significant source of the individual’s earned income" if the individual had NEC income but it was not the most significant income source. Select "Yes" if the NEC was the individual’s most significant source of income and the individual qualified for independent contractor status. Select "No" if the NEC was the individual’s most significant source of income but the individual did not qualify for independent contractor status.
Item 2 Select "Yes" if the taxpayer hired any of the listed workers for a business filing a Schedule C, C-EZ, or F. Otherwise select "No" . A "Yes" response to this items activates Items 3-6.
Item 3 For each of the form types listed, check the box if the taxpayer was required to file the form but did not.
Item 4 Indicate the accuracy with which the taxpayer reported bonuses, prizes, awards, fringe benefits and/or non-cash compensation to workers. Select "NA, TP did not provide compensation of these types" if the TP had workers but did not use these forms of compensation. Select "Yes…." if the taxpayer provided any of these types of compensation and reported all of it properly. Select "Partially, …" if the taxpayer provided any of these types of compensation and reported some of it properly. If this response is selected, also select the percentage of the compensation that was reported properly. Select the closest percentage. Select "No, …" if the taxpayer provided any of these types of compensation and none of it was reported properly.
Item 5 Provide information about the taxpayer’s treatment of workers as independent contractors. In the first box, enter the number of workers the taxpayer treated as independent contractors. In the second box, for the workers included in the count in the first box, enter the number for whom the taxpayer filed a Form 1099-MISC for NEC. Finally, in the third box, for the workers included in the count in the first box, enter the number who qualify for independent contractor status under the worker classification rules discussed in Publication 1779.
Item 6a Select "Yes" if you referred the case to an employment tax specialist. Otherwise, select "No" .
Item 6b Select the reason(s) you referred the case to an employment tax specialist. Select all that apply. If the reason is one other than listed, select "Other" and briefly describe.
E-Commerce
Item 1a Select "Yes" if the taxpayer used accounting software to maintain their books and records. Otherwise, select "No" .
Item 1b If the response to Item 1a is"Yes" , enter the brand of software used by the taxpayer. If the brand is other than one listed, select "Other" and specify the brand in the box provided.
Item 2a Select "Yes" if the taxpayer used point-of-sale software to record sales transactions. Otherwise, select "No" .
Item 2b Select "Yes" if you performed an audit test to determine the accuracy of the system, including whether certain income transactions were systematically omitted by the point-of-sale process. Otherwise, select "No" .
Item 3a Select "Yes" if the taxpayer received electronic payments through credits cards, debit cards, internet payments, or other electronic payment systems. Otherwise, select "No" .
Item 3b Select "Yes" if the examination reconciled electronic payments to the Sales or Accounts Receivable Ledger. Otherwise, select "No" .
Item 4 If either of the audit steps in Items 2b or 3b resulted in the detection of unreported income, enter the total amount of unreported income detected.
Item 5a Select "Yes" if you used any Internet tools to augment the examination. Otherwise, select "No" .
Item 5b Select "Yes" if the search was helpful to the case. Otherwise, select "No" .
Item 5c Select "Yes" if the search uncovered unreported income. Otherwise, select "No" .
Item 6a Select "Yes" if the taxpayer had a business web site. Otherwise, select "No" .
Item 6b Indicate how the web site(s) was used. Select all that apply.
Item 6c Enter in the box provided the number of distinct web sites used by the taxpayer. If the taxpayer used three different web addresses to point to one web site, enter "1" as the number of distinct web sites.
Item 6d Select "Yes" if the taxpayer accepted online payments. Otherwise, select "No" .
Item 6e Select "Yes" if the review of the web site(s) resulted in the discovery of unreported income. Otherwise, select "No" .
Item 7a Select the sources of the taxpayer’s e-commerce activities. Select all that apply.
Item 7b Select "Yes" if the taxpayer’s activities in Item 7a were reported properly. Select "No" if the taxpayer’s activities in Item 7 were not reported properly.
Item 8 If any of the steps reflected in Items 5, 6, and/or 7 resulted in the detection of unreported income, enter the amount of unreported income detected from these steps in the box provided.
Item 9 Select the proportion of the taxpayer’s gross revenues that came from internet sales from the drop down list. Select the closest.
Asset Price and Basis For Securities Reported or Established on Schedule D
Item 1 Select "Yes" if the taxpayer reported or the examination established the sale and/or disposition of publicly traded securities on Schedule D Part I lines 1-2 or Schedule D Part II lines 8-9. For this item, publicly traded securities are transactions reported to the taxpayer by a broker on Form 1099-B, box 2. Otherwise, select "No" .
Item 2 If the response to item 1 is "Yes," enter in the boxes provided, the per return and per exam totals for sales price and basis for all reported or established publicly traded securities. Report the totals for short term and long term separately.
Credit Section
The credits section of the DCI is applicable only for cases that are NOT in the EITC sample codes (i.e., the taxpayer did not claim EITC on the original return). The only exception is a case that (1) is not in the EITC sample codes and (2) where EITC was added on an amended return filed and processed prior to the NRP
Item 1 Select "Yes" if EITC is being established during the examination. Otherwise, select "No" .
Item 2a Enter the taxpayer’s per exam EITC investment income (disqualified income). Enter whole dollar amounts only; no cents.
Item 2b Enter the taxpayer’s per exam EITC earned income. Enter whole dollar amounts only; no cents.
Item 3a If EITC with a qualifying child(ren) is being established during the examination, select "Yes" . Otherwise select "No" . (EITC without a qualifying child(ren) is being established.)
Item 3b Select the number of qualifying children that are being allowed.
Item 3c EITC Qualifying Child Detail Information(QCDI)
This section collects information about the child, or children, being allowed for EITC. Because this child is being added as an EITC qualifying child, it is presumed that the child satisfies all the relevant EITC qualifying rules and only selected data are being collected on the child.
QCD1 Item 1 Enter the child’s first name.
QCD1 Item 2 Enter the child’s last name.
QCD1 Item 3 Enter the child’s SSN. If the child is not required to have an SSN, leave the SSN field blank and select the "SSN not required" box.
QCD1 Item 4 Select "Yes" if at the time you were exploring whether this child was an EITC qualifying child of the taxpayer and looking into whether someone else had already claimed this child for a tax benefit, another taxpayer already had claimed this child for a tax purpose. Otherwise select "No" .
QCD1 Item 5 This item is applicable only if QCDI Item 4 is "Yes" . Select all purposes for which this child had been claimed by another taxpayer.
QCD1 Item 6 Select the relationship of the child to the taxpayer. Each category includes adopted, great, step where appropriate. For example, select "son" for an adopted son; granddaughter for a great-granddaughter.
QCD1 Item 7 Select "Yes" if the child was married at the end of 2006. Otherwise, select "No" .
QCD1 Item 8 Select the statement that describes the source(s) of information that you relied upon to determine that the child met the relationship requirement.
• If written documentation alone--either from IRS case building material or documents provided by the taxpayer-substantiate the relationship, select "Relied on written documentation alone" .
• If there was no relevant case building information and no relevant taxpayer provided documentation concerning the relationship between the taxpayer and child, and you accepted the oral testimony of the taxpayer as substantiation of the relationship, select "Relied on oral testimony alone" .
• If there was partial, relevant written documentation--either IRS case building material or taxpayer provided--concerning the relationship between the taxpayer and the child, and you relied on this documentation in conjunction with the taxpayer’s oral testimony as substantiation of the relationship, select "Relied on both written documentation and oral testimony" .
QCD1 Item 9 Enter the child’s date of birth.
QCD1 Item 10 If applicable, enter the child’s date of death.
QCD1 Item 11 Select "Yes" if the child was a full time student (under the full time student criteria for EITC.) Select "No" if the child was not a full time student (under the full time student criteria for EITC.) Select "N/A - Not in the age range," if the child is not age 19-23 at the end of 2006.
QCD1 Item 12 Select "Yes" if the child was a permanently and totally disabled. Select "No" if the child was not permanently and totally disabled. Select N/A - "Not in the age range," if the child is not age 19 or older at the end of 2006.
QCD1 Item 13 Select the statement that describes the source(s) of information that you relied upon to determine that the child met the age requirement.
• If written documentation alone--either from IRS case building material or documents provided by the taxpayer—substantiate the age requirement, select "Relied on written documentation alone" .
• If there was no relevant case building information and no relevant taxpayer provided documentation concerning the age requirement, and you accepted the oral testimony of the taxpayer as substantiation of the age requirement, select "Relied on oral testimony alone" .
• If there was partial, relevant written documentation--either IRS case building material or taxpayer provided material--concerning the age requirement, and you relied on this documentation in conjunction with the taxpayer’s oral testimony as substantiation of the age requirement, select "Relied on both written documentation and oral testimony" .
QCD1 Item 14 Enter the number of months for which there is substantiation that the child lived with the taxpayer in the US. This substantiation can be either relevant written documentation—either IRS case building information or taxpayer provided materials—or acceptable oral testimony. Use whole months and round up. If less than 7 months but more than half the year, enter 7 months because 6 months is considered less than half the year. If the child satisfies the residency requirement because of the kidnapped child criteria, select the "KC (Kidnapped Child)" response option.

Examples

1. The taxpayer said that they lived with the child in the US for the entire year and provided relevant documents covering 9 months. You are accepting the taxpayer’s oral testimony for the remaining 3 months. Enter 12 months for QCDI Item 14.

2. The taxpayer(s) said that they lived with the child in the US for the entire year and provided relevant documentation for 7 months. You are not accepting the taxpayer’s oral testimony for the remaining time because of credibility issues. Enter 7 months for QCDI Item 14.
QCD1 Item 15 Select the statement that describes the source(s) of information that you relied upon to determine that the child met the residency requirement.
• If written documentation alone--either from IRS case building material or documents provided by the taxpayer—substantiate the residency requirement, select "Relied on written documentation alone" .
• If there was no relevant case building information and no relevant taxpayer provided documentation concerning the residency requirement, and you accepted the oral testimony of the taxpayer as substantiation of the residency requirement, select "Relied on oral testimony alone" .
• If there was partial, relevant written documentation--either IRS case building material or taxpayer provided material--concerning the residency requirement, and you relied on this documentation in conjunction with the taxpayer’s oral testimony as substantiation of the residency requirement, select "Relied on both written documentation and oral testimony" .

Exhibit 4.22.8-3  (04-25-2008)
NRP Supplemental Questionnaire, Part B: Completing the EITC Section of the Data Collection Instrument (DCI)

ITEM INSTRUCTION
EITC Section  
The EITC section of the DCI is applicable to all cases in the NRP EITC sample codes and any case where ETIC was first claimed by a taxpayer on an amended return filed and processed prior to the notification of the NRP examination.
General EITC Case Information
Item 1a Select "Yes" if you had at least one face-to-face meeting with the taxpayer. Select "No" if you never met face-to-face with the taxpayer.
Item 1b Applicable only when response to 1a is "No" . Select all appropriate reasons. Check as many as apply to the case. If the reason is other than one listed, select "Other" and briefly explain.
Item 1c Applicable only when response option "TP cancelled or missed all appointments" is selected. Enter the total number of appointments that the taxpayer cancelled. A cancelled appointment is an appointment the taxpayer cancelled prior to the time of the appointment.
Item 1d Applicable only when response option "TP cancelled or missed all appointments" is selected. Enter the total number of appointments for which the taxpayer did not show. A missed appointment is an appointment for which the taxpayer did not show and did not cancel prior to the appointment time.
Item 2 Applicable only if response to Item 1a is "Yes" or Item 1b is "Met with representative only" . Select all locations where you met with the taxpayer. Check as many as apply. If you met at a location other than one listed, select "Other" and briefly describe.
Item 3a Select "Yes" if the taxpayer indicated that she/he had responded to the math error notice prior to notification of the NRP examination, regardless of the outcome of the response. Select "No" if the taxpayer indicated that she/he did not respond to the math error notice. Select "No Math Error" if there are no math errors notice codes on RTVUE.
Item 3b Applicable only if response to Item 3a is "No" . Select "Yes" if the taxpayer indicated why she/he did not response to the math error notice. Select "No" if the taxpayer gave no indication of why she/he did not respond to the math error notice.
Item 3c Applicable only if response to Item 3b is "Yes" . Select all appropriate reasons. Check all that apply. If a reason is other than one listed, select "Other" and explain briefly.
EITC Income Information
Item 1 Enter the taxpayer’s per exam EITC investment income (disqualified income). Enter whole dollars only. No cents.
Item 2 Enter the taxpayer’s per exam EITC earned income. Enter whole dollars only. No cents.
EITC Eligibility Rules For All Taxpayers
Shortcut If the taxpayer satisfies all the EITC eligibility criteria covered by Items 1-8, select the checkbox. (Note: This does not mean that all the responses to Items 1-8 are "Yes" .) Selection of this shortcut will "gray-out" Items 1-8 and eliminates the need to respond to items 1-8 individually.
Item 1 Select "Yes" if the primary taxpayer has a Social Security Number issued by the Social Security Administration. Select "No" otherwise.
Item 2 Select "Yes" if the primary SSN is valid for EITC purposes.
Item 3 Select "Yes" if the secondary taxpayer has a Social Security Number issued by the Social Security Administration. Select "No" if the secondary taxpayer does not have a Social Security Number issued by the Social Security Administration. Select"No Secondary TP" if there is no secondary taxpayer.
Item 4 Applicable only for cases with a secondary taxpayer. Select "Yes" if the secondary SSN is valid for EITC purposes.
Item 5 Select "Yes" if the taxpayer (including secondary if applicable) was a US Citizen or resident alien for all of the year (including exceptions for treating a non-resident alien spouse as a resident alien). Select "No" otherwise.
Item 6 Select "Yes" if the taxpayer was allowed a foreign earned income exclusion, housing exclusion or housing deduction (Form 2555/2555 EZ) Select "No" otherwise.
Item 7 Select "Yes" if the primary taxpayer is a qualifying child of another person. Select "No" otherwise.
Item 8 Select "Yes" if the secondary taxpayer is a qualifying child of another person. Select "No" if the secondary taxpayer is not a qualifying child of another person. Select "No Secondary TP" if there is no secondary taxpayer.
Number of EITC Qualifying Children Per Exam
Item 1 Select the appropriate option for the number of qualifying children the taxpayer has, per exam. (A qualifying child is a child who meets the EITC qualifying child relationship, age, and residency criteria.)
Additional EITC Eligibility Information/Rules For Taxpayers who have No EITC Qualifying Children
Shortcut If the taxpayer satisfies all the EITC eligibility criteria covered by Items 1-5, select the checkbox. (Note: This does not mean that all the responses to Items 1-5 are "Yes" .) Selection of this shortcut will "gray-out" Items 1-5 except for the correction of the year of birth fields. If the taxpayer’s NAP year of birth are correct, select the "NAP date of birth is correct" box. Otherwise enter corrections to the primary and secondary taxpayer’s years of birth if the NAP date of birth are incorrect. Using the shortcut eliminates the need to respond to items 1-5 individually.
Item 1 Select "Yes" if the primary taxpayer meets the age criteria. Otherwise, select "No" . If the primary taxpayer’s NAP year of birth is incorrect, enter the correct year of birth. Otherwise, select "NAP date is correct" if the primary taxpayer’s NAP year of birth is correct.
Item 2 Select "Yes" if the secondary taxpayer meets the age criteria. Otherwise, select "No" . If the secondary taxpayer’s NAP year of birth is incorrect, enter the correct year of birth. Otherwise, select "NAP date is correct" if the secondary taxpayer’s NAP year of birth is correct.
Item 3 Select "Yes" if the primary taxpayer is a dependent of another person. Otherwise select "No" .
Item 4 Select "Yes" if the secondary taxpayer is a dependent of another person. Select "No" if the secondary taxpayer is not a dependent of another person. Select "No Secondary TP" , if there is no secondary taxpayer.
Item 5 Select "Yes" if the taxpayer’s main home was outside the US for more that half the tax year. Otherwise, select "No" .
EITC Qualifying Child Summary Information
Item 1 Select the appropriate choice for the number of EITC qualifying children with SSNs valid for EITC.
Item 2 Select the appropriate choice for the number of qualifying children that are available for the taxpayer to claim as EITC qualifying children. This is the number of qualifying children that have SSNs valid for EITC minus the number of these children that other taxpayers are being allowed to use that preclude the taxpayer from claiming them as EITC qualifying children.
EITC Qualifying Child Detail Information
Item 1a Enter the TINs of any children listed by the taxpayer on Schedule EIC that were not deleted ("X" ed) during pipeline processing. Select "None" , if the taxpayer had no such children.
Item 1b Enter the TINs of any children listed by the taxpayer on Schedule EIC who were deleted ("X" ed) during pipeline processing. Select "None" , if the taxpayer had no such children.
Item 1c Select the number of children first claimed for EITC on an amended return. Select "0" if an amended return was filed but no children were first claimed for EITC on the amended return. Enter the TINs of the children first claimed for EITC on a amended return. Select No Amended Return if the taxpayer did not file an amended return.
Item 1d Select the number of children that were not claimed by the taxpayer for EITC but are being established by the examination. Enter the SSNs for the children.
Information about Qualifying Children The responses to Qualifying Child Detail Information section will cause the appropriate sections for entering qualifying child information to appear.
EITC Qualifying Child Detail Information (information on children claimed by the taxpayer).
Item 1 Select "TIN is correct as reported" if the child’s TIN as reported and processed is correct. Select"Corrected TIN" if the child’s TIN as reported and processed is incorrect and the child has a TIN. Enter the correct TIN. Select "Child does not have a TIN" , if the child does not have a TIN (and is required to have a TIN). Select "SSN not required" if the child is not required to have an SSN for EITC.
Item 2 Applicable only if the child has an SSN. If child has an ITIN, ATIN, IRSN, or no identification number do not respond to this item. Select "Yes" if the child has an SSN and it is valid for EITC. Otherwise, select "No" if the child’s SSN is not valid for EITC.
Item 3 Select "First Name is correct as reported" , if the child’s first name is correct. Otherwise, select "Corrected First Name," if the child’s first name is not correct. Enter the correct first name.
Item 4 Select "Last Name is correct as reported" , if the child’s last name is correct. Otherwise, select "Corrected Last Name" , if the child’s last name is not correct. Enter the correct first name.
Item 5 Select the relationship of the child to the taxpayer as determined by the examination. Each category includes adopted, great, step where appropriate. For example, select "son" for an adopted son; granddaughter for a great-granddaughter.
If appropriate, select "Other" and briefly describe the relationship.
Item 6 Select "Yes" if the child was married at the end of the tax year. Otherwise select "No" .
Item 7 Applicable only if Item 6 is Yes. Select "Yes" if the child was married at the end of the year and the child meets the EITC qualifying child relationship test because one or both of the two special situations for a married child apply. Otherwise select"No" if the child was married at the end of the year and the child does not meet the EITC qualifying child relationship test because neither of the two special situations for a married child apply.
Item 8 Select "Test Met" if the child satisfies the EITC qualifying child relationship test. Otherwise, select "Test Not Met" if the child does not satisfy the EITC qualifying child relationship test.
Item 9 Applicable only if response to Item 8 is "Test Met" . Select the statement that describes the source(s) of information that you relied upon to determine that the child met the relationship requirement.
• If written documentation alone--either from IRS case building material or documents provided by the taxpayer—substantiate the relationship, select "Relied on written documentation alone" .
• If there was no relevant case building information and no relevant taxpayer provided documentation concerning the relationship between the taxpayer and child, and you accepted the oral testimony of the taxpayer as substantiation of the relationship, select "Relied on oral testimony alone" .
• If there was partial, relevant written documentation--either IRS case building material or taxpayer provided--concerning the relationship between the taxpayer and the child, and you relied on this documentation in conjunction with the taxpayer’s oral testimony as substantiation of the relationship, select "Relied on both written documentation and oral testimony" .
Item 10 Select "DOB is correct as reported" if the child’s NAP date of birth is correct. Select "Corrected DOB" if the child’s NAP date of birth is incorrect. Enter the correct date of birth.
Item 11 Applicable only if child is no longer living. Select "DOD is correct as reported" if the child’s NAP date of death is correct. Select "Corrected" if the child’s NAP date of death is incorrect. Enter the correct date of death.
Item 12 Select "Yes" If the child is a full-time student (under the full time student criteria for EITC). or select "No" if the child is not a full-time student (under the full time student criteria for EITC). Select "N/A" if the child is not in the age range.
Item 13 Select "Yes" if the child is a permanently and totally disabled. Select "No" if the child is not permanently and totally disabled. Select "N/A" if the child is not in the age range.
Item 14 Select "Test Met" if the child satisfies the EITC qualifying child age test. Otherwise, select "Test Not Met" if the child does not satisfy the EITC qualifying child age test.
Item 15 Select the statement that describes the source(s) of information that you relied upon to determine that the child met the age requirement.
• If written documentation alone--either from IRS case building material or documents provided by the taxpayer—substantiate the age requirement, select "Relied on written documentation alone" .
• If there was no relevant case building information and no relevant taxpayer provided documentation concerning the age requirement, and you accepted the oral testimony of the taxpayer as substantiation of the age requirement, select "Relied on oral testimony alone" .
• If there was partial, relevant written documentation--either IRS case building material or taxpayer provided material--concerning the age requirement, and you relied on this documentation in conjunction with the taxpayer’s oral testimony as substantiation of the age requirement, select "Relied on both written documentation and oral testimony" .
Item 16 Enter the number of months (or "KC (Kidnapped Child)" as appropriate) the taxpayer said that the child and taxpayer lived together in the US. Enter the number of months reported on the Schedule EIC unless the taxpayer reported something different during the examination.

For the latter case, enter the number of months as reported by the taxpayer during the examination. Use whole months and round up. If less than 7 months but more than half the year, enter 7 months because 6 months is considered less than half the year.
Item 17 Enter the number of months for which there is substantiation that the child lived with the taxpayer in the US. This substantiation can be either relevant written documentation—either IRS case building information or taxpayer provided materials—or acceptable oral testimony.

Use whole months and round up. If less than 7 months but more than half the year, enter 7 months because 6 months is considered less than half the year.

If the child satisfies the residency requirement because of the kidnapped child criteria, select the "KC (Kidnapped Child)" response option.

Examples

1. The taxpayer said that they lived with the child in the US for the entire year and provided relevant documents covering 9 months. You are accepting the taxpayer’s oral testimony for the remaining 3 months. Enter 12 months for QCDI Item 17.

2. The taxpayer(s) said that they lived with the child in the US for the entire year and provided relevant documentation for 7 months. You are not accepting the taxpayer’s oral testimony for the remaining time because of credibility issues. Enter 7 months for QCDI Item 17.
Item 18 Select "Yes" if the child was born or died during the tax year and lived with the taxpayer the entire time she/he was alive. Otherwise select "No" if the child was born or died during the tax year and did not live with the taxpayer the entire time she/he was alive. Otherwise select N/A if the child was not born and did not die during the tax year.
Item 19 Select "Test Met" if the child satisfies the EITC qualifying child residency test. Otherwise, select "Test Not Met" if the child does not satisfy the EITC qualifying child residency test.
Item 20 Select the statement that describes the source(s) of information that you relied upon to determine that the child met the residency requirement.
• If written documentation alone--either from IRS case building material or documents provided by the taxpayer—substantiate the residency requirement, select "Relied on written documentation alone" .
• If there was no relevant case building information and no relevant taxpayer provided documentation concerning the residency requirement, and you accepted the oral testimony of the taxpayer as substantiation of the residency requirement, select "Relied on oral testimony alone" .
• If there was partial, relevant written documentation--either IRS case building material or taxpayer provided material--concerning the residency requirement, and you relied on this documentation in conjunction with the taxpayer’s oral testimony as substantiation of the residency requirement, select "Relied on both written documentation and oral testimony" .
Item 21 Select "Yes" if another taxpayer(s) had filed a return claiming this child as an EITC qualifying child or for another tax benefit(s).
Item 22 Select all uses for which this child had been claimed by another taxpayer(s). Select all that apply.
Item 23 Select "Yes" if, but for the fact that someone else is using the child for a tax benefit, the taxpayer would be claiming and allowed EITC on the basis of this child. Otherwise, select "No" .
Item 24 Select all purposes for which this child is being used by another taxpayer(s). Select all that apply.
Child Eligibility for Children Established by the Examination
This section collects information about the child, or children, being allowed for EITC. Because this child is being added as an EITC qualifying child, it is presumed that the child satisfies all the relevant EITC qualifying child rules and only selected data are being collected on the child.
Item 1 Enter the child’s first name.
Item 2 Enter the child’s last name.
Item 3 Enter the child’s SSN. If the child is not required to have an SSN, leave the SSN field blank and select the "SSN not required" box.
Item 4 Select "Yes" if at the time you were exploring whether this child was an EITC qualifying child of the taxpayer and looking into whether someone else had already claimed this child for a tax benefit, another taxpayer already had claimed this child for a tax purpose. Otherwise select "No" .
Item 5 This item is applicable only if Item 4 is "Yes" . Select all purposes for which this child had been claimed by another taxpayer.
Item 6 Select the relationship of the child to the taxpayer. Each category includes adopted, great, step where appropriate. For example, select "son" for an adopted son; granddaughter for a great-granddaughter.
Item 7 Select "Yes" if the child was married at the end of 2006. Otherwise, select "No" .
Item 8 Select the statement that describes the source(s) of information that you relied upon to determine that the child met the relationship requirement.
• If written documentation alone--either from IRS case building material or documents provided by the taxpayer—substantiate the relationship, select "Relied on written documentation alone" .
• If there was no relevant case building information and no relevant taxpayer provided documentation concerning the relationship between the taxpayer and child, and you accepted the oral testimony of the taxpayer as substantiation of the relationship, select "Relied on oral testimony alone" .
• If there was partial, relevant written documentation--either IRS case building material or taxpayer provided--concerning the relationship between the taxpayer and the child, and you relied on this documentation in conjunction with the taxpayer’s oral testimony as substantiation of the relationship, select "Relied on both written documentation and oral testimony" .
Item 9 Enter the child’s date of birth.
Item 10 If applicable, enter the child’s date of death.
Item 11 Select "Yes" if the child was a full time student (under the full time student criteria for EITC). Select "No" if the child was not a full time student (under the full time student criteria for EITC). Select "N/A" for a child not in the age range.
Item 12 Select"Yes" if the child was a permanently and totally disabled. Select "No" if the child was not permanently and totally disabled. Select "N/A" for a child not in the age range.
Item 13 Select the statement that describes the source(s) of information that you relied upon to determine that the child met the age requirement.
• If written documentation alone--either from IRS case building material or documents provided by the taxpayer—substantiate the age requirement, select "Relied on written documentation alone" .
• If there was no relevant case building information and no relevant taxpayer provided documentation concerning the age requirement, and you accepted the oral testimony of the taxpayer as substantiation of the age requirement, select "Relied on oral testimony alone" .
• If there was partial, relevant written documentation--either IRS case building material or taxpayer provided material--concerning the age requirement, and you relied on this documentation in conjunction with the taxpayer’s oral testimony as substantiation of the age requirement, select "Relied on both written documentation and oral testimony" .
Item 14 Enter the number of months for which there is substantiation that the child lived with the taxpayer in the US. This substantiation can be either relevant written documentation—either IRS case building information or taxpayer provided materials—or acceptable oral testimony. Use whole months and round up. If less than 7 months but more than half the year, enter 7 months because 6 months is considered less than half the year.

If the child satisfies the residency requirement because of the kidnapped child criteria, select the "KC (Kidnapped Child)" response option.

Examples

1. The taxpayer said that they lived with the child in the US for the entire year and provided relevant documents covering 9 months. You are accepting the taxpayer’s oral testimony for the remaining 3 months. Enter 12 months for Item 14.

2. The taxpayer(s) said that they lived with the child in the US for the entire year and provided relevant documentation for 7 months. You are not accepting the taxpayer’s oral testimony for the remaining time because of credibility issues. Enter 7 months for Item 14.
Item 15 Select the statement that describes the source(s) of information that you relied upon to determine that the child met the residency requirement.
• If written documentation alone--either from IRS case building material or documents provided by the taxpayer—substantiate the residency requirement, select"Relied on written documentation alone" .
• If there was no relevant case building information and no relevant taxpayer provided documentation concerning the residency requirement, and you accepted the oral testimony of the taxpayer as substantiation of the residency requirement, select "Relied on oral testimony alone" .
• If there was partial, relevant written documentation--either IRS case building material or taxpayer provided material--concerning the residency requirement, and you relied on this documentation in conjunction with the taxpayer’s oral testimony as substantiation of the residency requirement, select "Relied on both written documentation and oral testimony" .
   

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