VALID › Notice Library › CP590 notice
In the IRS’s own words · not reviewed by VALID
CP590 notice explained, in the IRS’s own words
This notice is sent to you when you incorrectly claimed one or more of the following on your client’s returns:
Read the full CP590 page on irs.gov ↗
What this notice is about
This notice is sent to you when you incorrectly claimed one or more of the following on your client’s returns:
- Earned Income Tax Credit (EITC)
- American Opportunity Tax Credit (AOTC)
- Child Tax Credit (CTC) / Additional Child Tax Credit (ACTC) / Credit for Other Dependents (ODC)
- Head of Household (HOH) filing status
What you need to do
Follow your due diligence requirements so you and your clients can avoid penalties and other unwanted actions.
You may want to
- Review Internal Revenue Code section 6695(g) and Treasury Regulation section 1.6695-2.
- Review common mistakes:
EITC
- Underreporting wages or income and misreporting income and expenses from Schedule C, Profit or Loss from Business.
- Claiming children who aren’t your client’s child, sibling, grandchild, niece or nephew.
- Claiming children who didn’t live with your client for more than 6 months.
- Claiming the EITC for a married client who doesn't file a joint return and doesn't meet the additional rules to claim the EITC.
AOTC
- Claiming a student who didn't receive a Form 1098-T, Tuition Statement or attend an eligible institution at least half-time for an academic period. An eligible educational institution is a college, university, vocational school, or other postsecondary educational institution eligible to take part in a student aid program administered by the U.S. Department of Education.
- Claiming a student who didn't have qualified education expenses.
- Claiming a student who had already completed four years of post-secondary school at the beginning of the year or already received the credit for four years.
- Claiming a student who didn't pursue a degree, certificate, or other recognized education credential.
CTC/ACTC/ODC
- Claiming a child or other dependent who didn't meet the relationship, residency, or age requirements.
Household helper claiming EITC
- No matching Form W-2, Wage and Tax Statement, Form 1099-MISC, Miscellaneous Income, or Form 1099-NEC, Nonemployee Compensation, from the person the work was performed for.
What to do next
- Write down the date on the letter today.
- Look the number up on irs.gov yourself. Don’t trust a link or phone number from anyone else.
- If it says you owe money or proposes changes to your return, take it to a licensed CPA, EA or tax attorney before that date.
Not advice. Not a filing. Verify with a licensed professional. Rules change by year and facts.