The CP27 means the IRS reduced or removed the Earned Income Tax Credit you claimed on your return. This was done under math error authority during return processing, not through a full audit. The result is either a reduced refund or a balance due.
Why Your EITC Was Changed
Common reasons include income that exceeds the EITC limits based on the IRS's records, a qualifying child claimed by another taxpayer, missing or incorrect Social Security numbers for qualifying children, investment income exceeding the limit, and filing status issues that affect eligibility.
The IRS may also reduce EITC if their records show different income amounts than what you reported. Since EITC is calculated based on earned income, even small income changes can significantly affect the credit amount.
Your 60-Day Window
Because this change was made under math error authority, you have 60 days to request abatement. If you request abatement within 60 days, the IRS must reverse the change and go through the normal deficiency process, which gives you more rights. After 60 days, the change is final.
If you believe you qualify for the full EITC as claimed, respond within 60 days with documentation proving your eligibility. Include proof of income, qualifying children, and residency.
If the IRS Is Right
If you review your situation and determine the IRS correctly adjusted your EITC, no action is needed. Your refund will be reduced or a balance will be assessed. Pay any balance to stop penalties and interest.
Going forward, verify your EITC eligibility before claiming it. The IRS provides the EITC Assistant tool on irs.gov to help you determine whether you qualify and estimate the credit amount.
If you've received a CP27 and believe your EITC was incorrectly reduced, call us at (813) 229-7100.