TAP A03-023

EITC Alternative Documentation

Statement of Issue:

The EITC Committee was asked to recommend alternative documentation that the IRS might accept to establish a taxpayer’s eligibility to claim the EITC with a qualifying child under the IRS precertification initiative

Proposal:

While not endorsing the precertification process, the Committee endorsed the IRS' use of third party affidavits as an acceptable form of documentation to verify the EITC residency requirement for a qualifying child. In addition, the Committee recommended adding “landlord/housing manager” and "neighbor" to the list of third parties as sources of verification. The Committee also proposed that the documentation requirements for proving a child's relationship to a taxpayer other than biological or adoptive parents be significantly eased, for example, by presuming that the relationship requirement is met if the residency requirement is met and accepting a third party affidavit as satisfactory documentation for the relationship requirement as well as the residency requirement.

Several Committee recommendations are reflected in changes made to the IRS initiative and forms, including:

• Postponement of pilot program while public comment was solicited.
• Reduction in scope of pilot program to obtain proof of residence from taxpayers based on demographics.
• Elimination of relationship documentation requirement.
• Addition of “Landlord or property manager” as source of verification of residence of “qualifying child.”
• Addition of neighbors as source of verification of residence of “qualifying child” under consideration.
• Elimination of requirement that child-care provider supplying verification of residence be “licensed.”