Was your 2019 Earned Income Tax Credit denied because of a missing 1099? The LITC can help.

Date: August 31, 2023

In March 2021, the IRS destroyed 30 million information returns, mainly 2019 1099s reporting self-employment income. The IRS took this step to alleviate the paper backlog from the pandemic shut down and allow for the processing of incoming 2020 1099s. The IRS should have adjusted it’s EITC audit filters for missing 1099s but failed to do take that corrective step. Instead, the IRS audited three times the number of taxpayers claiming EITC based on self-employment income. The IRS should have informed IRS Examiners of this problem but failed to take that corrective step as well. Unfortunately, many taxpayers who properly claimed EITC based on self-employment income in 2019 were denied their refund or received the refund and later were asked to pay it back with penalties and interest doubling the amount owed back. If this is you or anyone you know, please contact us for help.

If you have questions or would like to consult with an attorney, contact the Indiana Legal Services Low Income Taxpayer Clinic at tax.clinic@ilsi.net or (812) 339-7668.

Eli Nahmias,
Low Income Taxpayer Clinic Law Clerk