What the notice means
The CP75 page: “We’re auditing your tax return and need documentation to verify the Earned Income Credit (EIC) you claimed. We are holding the EIC, the Additional Child Tax Credit (ACTC) and/or Recovery Rebate Credit (RRC) parts of your refund until we get the results of this audit.” The rest of the refund is paid. The notice comes with a Response form and one enclosed form per issue describing the documents to send.
IRM 4.19.14.5 lays out the four versions:
- “CP 75 letter is used for pre-refund cases to inform the taxpayer that we are delaying the EITC, and/or the ACTC part of their refund. If the PTC is claimed, then we may hold all or a part of the refund.”
- “CP 75A letter is used for post-refund or cases with a balance due or zero balance so there is no refund to hold.” The IRS CP75A page lists EIC, dependents and filing status as the items under audit.
- CP75D is used for pre-refund questionable refund program cases and “informs the taxpayer that we’ve delayed sending their full refund.” Its page adds that “The amounts you reported on the wages and withholding lines of your tax return appear incorrect.”
- “The CP 75C is not an initial contact letter.” It is sent when EITC is claimed during a 2-year or 10-year ban; the page says “You are banned from claiming the Earned Income Tax Credit (EIC) due to your intentional disregard of the rules or a fraudulent claim in a prior tax year,” and the IRM says the next letter is the Letter 3219 notice of deficiency.
The IRS page is direct about the consequence of silence: “We’ll disallow the audited items and send you an examination report showing the proposed changes to your tax return.”
Why the client got it
Selection is systemic. IRM 4.19.14.4 maps project codes to initial contact letters; the CP75 and CP75A cover EITC recertification cases (a taxpayer with a recertification indicator who filed Form 8862), Dependent Database rule breaks on qualifying child, residency, relationship and filing status, Schedule C income used to generate earned income, and combinations with the American Opportunity Credit and Premium Tax Credit. Project codes 0697 and 0698 are the 2-year and 10-year ban cases that get a CP75C. The IRS page describes the methods as “random sampling, computerized screening, and comparison of information we receive such as Forms W-2 and 1099.”
IRM 4.19.14.5 explains the hold: pre-refund exams freeze the refund with “TC 810 (DDB/Unsubstantiated Pickups and Recertifications). The frozen refund consists of the EITC, ACTC, and PTC amount,” while questionable refund program referrals use a TC 570 that freezes the full refund. The notice paragraphs populate by project code, and each one points to an enclosed form:
| Issue on the notice | Form enclosed | What it asks for |
|---|---|---|
| EITC qualifying child | Form 886-H-EIC | Relationship, age and residency records (school, medical, landlord, agency letters) |
| Dependents | Form 886-H-DEP | Support for each dependent claimed |
| Filing status | Form 14824 | Proof of head of household or other status |
| Schedule C income | Form 11652 | Questionnaire plus records showing the business earned the income |
| Wages and withholding | Form 886-L | Documents showing the wages and withholding reported are correct |
| American Opportunity Credit | Form 886-H-AOC | Eligible education expenses |
| Premium Tax Credit | Form 14950 | PTC verification |
| Native American EITC | Form 13588 | Alternative documentation in lieu of Form 886-H-EIC |
Deadlines and what happens if they pass
IRM 4.19.13.2.4 sets the suspense: EITC initial contact letters without a report carry a 30-day suspense period, with the next letter issued by the automated system on day 42 (manual issuance no earlier than day 31). IRM 4.19.14.5 describes the sequence: the CP75 notices “will be followed by Letter 525, General 30 Day Letter, which includes an examination report, Form 4549, Income Tax Examination Changes, outlining the proposed changes,” and “The taxpayer is asked to respond to the Letter 525 within 30 days.” If nothing resolves the Letter 525, the Letter 3219 notice of deficiency issues; “The taxpayer is asked to respond to the Letter 3219 within 90 days (150 days if the taxpayer address is outside the United States),” and the case is closed as a default after 105 (or 165) days if no petition is filed.
| Letter | Response window | Source |
|---|---|---|
| CP75, CP75A, CP75D | 30 days; next letter at about day 42 | IRM 4.19.13.2.4 |
| Letter 525 with Form 4549 | 30 days; Appeals conference available | IRM 4.19.14.5 |
| Letter 3219 (notice of deficiency) | 90 days (150 outside the U.S.) to petition the Tax Court | IRM 4.19.14.5; IRC 6213(a) |
| Default | 105 or 165 days after Letter 3219 | IRM 4.19.14.5 |
The assessment statute is the usual three years; these cases close well inside it. The correspondence exam and Letter 525 pages cover the 30-day letter and Appeals request; Letter 3219 and the petition deadline calculator cover the 90-day letter.
How to respond
- Read each enclosed form and build the package issue by issue. The CP75 page says to “send all your documents at the same time and make sure your documents are easy to read to avoid confusion and processing delays.” Mark on the Response form which items each document supports.
- For a qualifying child, cover all three tests the IRM paragraphs name: relationship (birth certificates, adoption or custody orders), age (birth certificate) and residency for more than half the year (school or medical records, landlord or shelter letters, agency correspondence showing the child at the client's address). Third-party records dated during the year carry the most weight; a statement from a relative carries little.
- For Schedule C earned income, complete Form 11652 and attach business records: invoices, receipts, bank deposits, a license, Forms 1099-NEC or 1099-K. The examiner is testing whether the business existed and earned what was reported, because EITC depends on earned income.
- Send the package by the method the notice allows. The CP75 page lists the Campus Correspondence Exam Document Upload Tool first, then fax to the number on the notice, then mail with the notice stub. The CP75A and CP75D pages list fax and mail.
- Submit a Form 2848 with the response so the examiner can speak with you; a CAF-posted authorization also gets you copies of the Letter 525 and Letter 3219.
- If the client cannot substantiate an item, consider conceding it on the Response form rather than defaulting. IRM 4.19.14.5 says the taxpayer “has the option to provide the documents requested or agree they are not entitled,” and an agreed closing avoids the deficiency default and gives the examiner less reason to look at a ban.
- If the Letter 525 arrives with items still disallowed, respond within 30 days with additional documents or a request for an Appeals conference; see small case request. Once a Letter 3219 issues, only a Tax Court petition keeps the case out of assessment.
Keep filing. The CP75 pages say the client “should continue to file all required tax returns before the due date to avoid additional penalties and interest.” A later-year return claiming the same child will be screened against the open exam.
What the IRS does next
Once the CP75 is mailed the case moves to AIMS status 10 and cycle time starts (IRM 4.19.14.5). A complete response is worked by a correspondence examination technician; allowed children are recorded with a TC 971 AC 135 so later selections can take the result into account. If the response substantiates the items, the exam closes no change and the TC 810 hold is released. If it does not, the Letter 525 proposes the disallowance and any penalties, followed by the notice of deficiency and a default assessment if no petition is filed.
The ban is a separate determination. IRM 4.19.14.7.1: “The 2-year ban must be considered by the CET on every EITC, CTC/ACTC/ODC or AOTC deficiency case.” It applies when the taxpayer “recklessly or intentionally disregarded” the rules, the credit is denied in a notice of deficiency and the deficiency is assessed. The same section protects a non-responder: “A taxpayer’s failure to respond adequately or failure to respond at all, does not by itself, indicate that the taxpayer recklessly or intentionally disregarded the rules and regulations,” and “Inadequate documentation from the taxpayer by itself does not show reckless or intentional disregard of the rules.” The examiner is told to weigh prior audits of the same credits and whether the taxpayer is plainly trying to prove eligibility. The 10-year ban applies to fraudulent claims and runs through a fraud referral. After any disallowance, the client must file Form 8862 to claim the credit again (recertification), and a later claim is a likely CP75 selection.
A client who defaulted can still seek audit reconsideration with the documents that were never sent; see the request template. The IRS pages for the CP75A, CP75C and CP75D list Publication 3598, The Audit Reconsideration Process, for exactly this reason.
Related notices
- Letter 566: the general correspondence exam initial contact letter for non-EITC issues.
- Letter 525: the 30-day letter with the examination report that follows a CP75.
- Letter 3219: the notice of deficiency.
- CP05: a RIVO verification hold, which is not an examination.
- CP12: an EITC change made as a math error (for example, a missing Form 8862).
Questions practitioners ask
Is the whole refund held?
On a CP75, the IRM says the frozen amount is the EITC, ACTC and PTC portion; the rest is released. On a CP75D questionable refund case the full refund is frozen. A CP75A has no refund to hold.
How long does the client have?
The initial contact letter carries a 30-day suspense under IRM 4.19.13.2.4, with the Letter 525 generated at about day 42. Documents received after that are still considered through the Letter 525 and Letter 3219 stages.
The child lived with the client but the records are in a grandparent's name. What works?
Third-party records that place the child at the client's address for more than half the year: school enrollment and attendance records, medical records, daycare or agency letters, a landlord statement. Form 886-H-EIC lists acceptable documents by test.
What triggers the 2-year ban?
A determination under IRC 32(k) that the taxpayer recklessly or intentionally disregarded the rules, with the credit denied in a notice of deficiency and assessed. IRM 4.19.14.7.1 says silence or weak documentation alone does not establish it; prior disallowances of the same credit are the main risk factor.