CP 79A - Earned Income Credit Two Year Ban - Z Tax & Accounting

Receiving IRS Notice CP79A means the IRS has disallowed your Earned Income Credit (EIC) claim and restricted or banned you from claiming the credit until additional eligibility requirements are met. At Z Tax & Accounting, we help taxpayers respond to IRS notices, restore eligibility for tax credits, and navigate complex federal and state tax matters professionally.

IRS Notice CP79A is a serious notice because it generally indicates the IRS determined the taxpayer improperly claimed the Earned Income Credit on a prior return.

What Is IRS Notice CP79A?

IRS Notice CP79A informs taxpayers that:

• Their Earned Income Credit (EIC) was previously denied or reduced

• The IRS has restricted or banned future EIC claims

• Form 8862 must be completed before claiming the credit again

The notice generally follows an IRS examination or review involving eligibility for the Earned Income Credit.

What Is the Earned Income Credit (EIC)?

The Earned Income Credit, also called the Earned Income Tax Credit (EITC), is a refundable tax credit available to eligible low-to-moderate income taxpayers.

The credit may significantly increase a taxpayer’s refund even when little or no tax is owed.

Eligibility generally depends on:

• Earned income

• Filing status

• Number of qualifying children

• Residency requirements

• Social Security number requirements

• Investment income limitations

Because the credit is refundable, the IRS closely reviews EIC claims for accuracy.

Why Did the IRS Ban or Restrict the EIC?

The IRS may issue Notice CP79A after determining that the taxpayer improperly claimed the Earned Income Credit.

Common reasons include:

• Incorrect dependent claims

• Residency issues

• Income mismatches

• Filing status errors

• Duplicate dependent claims

• Missing supporting documentation

• Failure to meet EIC eligibility requirements

The IRS may impose restrictions when it determines the credit was claimed incorrectly.

What Is Form 8862?

Form 8862, Information To Claim Certain Credits After Disallowance, must generally be filed before the taxpayer can claim the Earned Income Credit again in future years.

The form allows the IRS to evaluate whether the taxpayer now qualifies for the credit after the prior disallowance.

Form 8862 is commonly associated with:

• Earned Income Credit (EIC)

• Child Tax Credit (CTC)

• Additional Child Tax Credit (ACTC)

• American Opportunity Tax Credit (AOTC)

What Happens After Filing Form 8862?

After the IRS receives Form 8862, the IRS may:

• Approve the EIC claim

• Request additional documentation

• Delay refund processing while reviewing eligibility

• Conduct further examination of the tax return

The IRS often requests documents verifying:

• Residency of qualifying children

• Relationship to dependents

• Income information

• Filing status

• School or medical records

Providing complete and accurate documentation is important to support the claim.

Common Documents the IRS May Request

Taxpayers may need to provide:

• Birth certificates

• School records

• Medical records

• Lease agreements

• Utility bills

• Wage statements

• Employer records

• Daycare records

• Residency documentation

Copies of documents are generally sufficient unless the IRS specifically requests originals.

What Should You Do After Receiving CP79A?

If you receive IRS Notice CP79A, you should:

• Carefully review the notice

• Determine why the EIC was disallowed

• Review prior tax returns

• Gather supporting documentation

• Complete Form 8862 accurately before claiming the credit again

Professional review of the IRS determination may help avoid future issues and delays.

Important Consequences of Improper EIC Claims

Improper Earned Income Credit claims may result in:

• Refund delays

• IRS examinations and audits

• Penalties and interest

• Temporary EIC bans

• Permanent disallowance in fraud cases

Taxpayers should ensure future EIC claims fully comply with IRS eligibility rules.

Professional IRS Notice and EIC Assistance

At Z Tax & Accounting, we assist taxpayers with:

• IRS Notice CP79A responses

• Form 8862 preparation

• Earned Income Credit eligibility reviews

• IRS examinations and audits

• Tax credit disputes

• Refund delay issues

• IRS appeals and collections

• Federal and state tax compliance

Our experienced IRS Enrolled Agents are admitted to practice before the IRS and provide professional representation for taxpayers nationwide.

Contact Z Tax & Accounting Today

If you received IRS Notice CP79A or need assistance restoring eligibility for the Earned Income Credit,  contact Z Tax & Accounting today.

We help taxpayers resolve IRS notice issues, protect their rights, and navigate complex tax matters with professionalism and confidence.

Call us today at (214) 699-4790 for professional IRS notice and tax resolution assistance.