Is there a delay in processing returns with a Form 8867?
The IRS was holding returns submitted with incomplete Forms 8867 and was sending Letter 12C to taxpayers requesting they provide the required missing information. As of February 19, these returns are no longer being held and 12C letters to taxpayers are no longer being issued. The IRS is now processing these held returns.
Should my client respond to the Letter 12C?
Yes, they should respond and provide the information requested as soon as possible. They should keep a copy for their files.
If my client’s return was one of those held prior to February 19, how long will it take for them to receive their refund?
Taxpayers can expect to receive their refunds in the next one to two weeks, assuming they electronically filed their return and chose direct deposit as the payment option and there are no other processing conditions related to their return that may require further review. They should check Where’s My Refund? to determine the status of their refund.
How will IRS address compliance with 8867 requirements now that the Letter 12C will not be sent?
The due diligence requirements are an important component of administering the EITC. IRS will contact tax preparers directly, as appropriate, after return processing is complete to address any compliance issues.