examination process questions

[Anonymous]

am self employed )operating without a business license) and I allow 2 of my friends to live in my house with 1 child each. they have lived with me all year and niether parent is filing taxes this year. I don’t charge either of them any money for rent, utilities or food etc. as they are both very close friends of mine. Now with that said, since the 2 children are under my roof I claimed them for the earned income credit. I have just received a letter from the irs requesting information to be submitted before I will receive my refund.
information requested are as follows:
1. EARNED INCOME CREDIT – FORM 886-H-EIC
2. DEPENDENTS – FORM 886-H-DEP
3. FILING STATUS – FORM 886-H-HOH
4. SCHEDULE C – FORM 11652

My question is… is this standard operating procedure for the irs review process? Do they normally ask for all this information to be submitted?

I don’t even know where to start. I have receipts for payments from the entire year proving my income totalling just over 13K. the parents of the children will cooperate and write any letter I need. the problem is that I support these children by providing a roof for them, but I don’t have guardian rights nor do I want them. I am just helping out my friends.

with the information I have provided do I need to be worried I will get in trouble for claiming my income which is, up til now, totally unreported and under the table in prior years.

any help would be appreciated.

thanks

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[vanessa]

UNFORTUNATELY NO, THIS IS NOT A NORMAL PROCESS. IT LOOKS LIKE YOU ARE BEING REVIEWED SINCE YOU PROBABLY HAVE NO DIRECT RELATIONSHIP WITH THE CHILDREN OR HAVE NOT CLAIMED THEM BEFORE. IF THE PARENTS WERE UNDER AGREEMENT, I AM SURE THIS IS SOMETHING THAT WILL BE ABLE TO BE FIXED,THE ONLY QUESTION IS WHEN. WILL PROBABLY TAKE SOME TIME.

[Irfan]

This is why people are told to wait for their W-2 s. The dernifefce is probably a deduction for something you have taken out pre-tax like health care or retirement.Did you file it yourself, or with somebody like H&R Block? If you filed through someone else, call them and ask if it was transmitted yet they’re not legally allowed to send it to the IRS without having the W-2.If you filed it yourself, then you know it’s already sent. In that case, you’ll have to file an amended return, 1040X. You can download the form and instructions at irs.gov. It’s not real complex, but must be filed on paper, not efiled.For your state, do it with the correct numbers from your W-2. You might end up with a letter from them too if they do their computer match with the feds before your federal return is corrected.You’re not in trouble with the IRS, but you’ve caused yourself some unnecessary aggravation.Good luck.

[Author]

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