The CP02 is the flip side of the CP09. Where the CP09 tells you that you may qualify for EITC you didn't claim, the CP02 tells you that you may not qualify for EITC you did claim. The IRS has information suggesting your EITC claim is incorrect, and they're giving you a chance to prove otherwise.
Why the IRS Is Questioning Your Claim
Common triggers include income that exceeds the EITC limits, filing status inconsistencies, qualifying child issues (the child may not meet age, relationship, or residency requirements), or prior EITC denials that require Form 8862 for recertification.
The IRS may also send a CP02 if they have information suggesting your reported income was inaccurate. Since EITC is calculated based on earned income, changes to your income amount can reduce or eliminate the credit.
How to Respond
You typically have 30 days to respond. If you believe you qualify for the EITC as claimed, respond with documentation proving each element: your income (W-2s, pay stubs), your filing status (marriage certificate or documentation of head of household status), and your qualifying children (birth certificates, school records proving residency, documentation of relationship).
If you realize you don't actually qualify, you can agree with the IRS's determination. They'll adjust your return, reduce or eliminate the credit, and you'll owe the difference plus interest. Filing an amended return proactively may reduce penalties.
The Stakes
If the IRS determines your EITC claim was incorrect due to reckless disregard of the rules, they can ban you from claiming EITC for two years. If fraud is involved, the ban extends to 10 years. During the ban period, you lose a credit worth potentially thousands of dollars per year.
Respond completely and on time. If you qualify, prove it. If you don't, accept the adjustment and avoid the ban.
If you've received a CP02, call us at (813) 229-7100.