CP75: What It Means and How to Respond

What the notice actually says

CP75 tells a taxpayer their return has been selected for a correspondence audit and that the IRS is holding the Earned Income Credit (EIC), Additional Child Tax Credit (ACTC), and, where claimed, Recovery Rebate Credit and Premium Tax Credit portions of the refund until the audit closes. The notice is not vague about what it wants: it encloses a separate substantiation form for each item under review — commonly Form 886-H-EIC for EIC eligibility, Form 886-H-HOH if head-of-household filing status is in question, and Form 14950 if the Premium Tax Credit is involved — and each form spells out exactly what documentation satisfies it.

That word, audit, is the whole point of this page. CP75 opens an actual correspondence examination under the IRS's normal exam authority, not an automated proposal. (For where CP75 sits among other IRS notices, see the IRS Notice Library.)

What the IRS is actually asking for

Most CP75s center on EIC eligibility for a qualifying child, and Form 886-H-EIC asks for documents proving the relationship, age, and residency tests — birth certificates, school or medical records showing the child's address, custody paperwork, and similar third-party proof, not a signed statement from the taxpayer. If filing status is also under review, Form 886-H-HOH asks for parallel proof that the taxpayer, not someone else, maintained the household. A Premium Tax Credit hold adds Form 14950 and marketplace enrollment documentation.

Being selected doesn't imply wrongdoing — the IRS's own CP75 guidance says as much, and correspondence exams of refundable-credit returns are a routine, high-volume part of the EIC compliance program. But routine selection and routine stakes are two different things: the credits held here are refundable, so an unsubstantiated claim doesn't just reduce a bill, it reverses money the return said was owed to the taxpayer.

Response deadline and what happens if you miss it

The window is 30 days from the date on the notice, stated plainly on the notice itself: respond within 30 days or the IRS disallows the audited items and the taxpayer may owe additional tax. Once a complete response goes in, the IRS says to allow at least 30 more days for review before expecting a closing letter and refund release or, if the documentation falls short, an audit report proposing changes with any additional tax, penalties, and interest.

If that audit report is unagreed, the case does not simply end — the taxpayer gets a 30-day letter with the right to request a conference with the IRS Independent Office of Appeals before the date on that letter. Skip that window too, and the IRS issues a formal Notice of Deficiency carrying a fixed 90-day clock (150 days if addressed outside the United States) to petition Tax Court — a deadline that, like its CP2000-track counterpart, the IRS cannot extend.

One consequence worth getting precisely right, because it's the one that gets overstated most: simply missing the 30-day deadline or falling short on documentation results in disallowance and a bill, not automatically the multi-year credit bar under IRC §32(k). That bar — two years for a claim the IRS specifically finds was due to reckless or intentional disregard of the rules, ten years for fraud — attaches only when the IRS makes that finding as part of a final determination, and parallel versions of it exist for the Child Tax Credit/ACTC (IRC §24(g)) and the American Opportunity Tax Credit (IRC §25A(b)(4)). A client who ignored the notice out of overwhelm is in a different, less severe position than one whose claim is affirmatively found reckless or fraudulent, and conflating the two with a client does real damage to an otherwise salvageable case. The rule to repeat: missing CP75 costs a client this year's credit, not the right to claim it again, but the next claim needs Form 8862. The 2- or 10-year bar applies only when the IRS makes a specific recklessness or fraud finding, not by default.

What to do next

Before advising on anything, confirm exactly which items the notice is auditing and pull the client's own records against each specific test the relevant form lists — a CP75 response that address the wrong element (income, say, when the notice is really testing residency) accomplishes nothing. Running the account transcript through The Federal Tax Desk's IRS Transcript Analyzer confirms what return was actually filed, whether a prior year's EIC claim was already disallowed (which changes whether Form 8862, Information to Claim Certain Credits After Disallowance, is required going forward), and whether the refund hold matches what the notice describes.

If the documentation genuinely supports the claim, get it in before the 30 days run — late-but-complete responses still get worked, but only a timely one avoids the disallowance-and-reversal step entirely. If the proof is thin or a qualifying-child test is genuinely borderline, that is a conversation to have with the client before the deadline, not after an audit report arrives. And if the audit does result in additional tax the client can't pay in full, The Federal Tax Desk's IA Payment Calculator will size a proposed installment agreement before that call to the IRS happens.

A client who can't afford paid representation for a CP75 audit isn't out of options — EIC eligibility skews toward lower-income households, and that's exactly who Low Income Taxpayer Clinics exist to serve. LITCs can represent a taxpayer in an audit like this one before the IRS and in court, generally for free or a small fee, where income falls under the clinic's threshold and the amount in dispute is under roughly $50,000. That's a real option to raise with a client who would otherwise let the 30 days lapse for lack of a fee to pay a preparer, not a footnote to mention only if everything else fails.

What people mistake CP75 for

The notice practitioners most often mistake CP75 for is CP2000, and the confusion is understandable — both can feel to a taxpayer like "the IRS thinks something is wrong with my return." They are not the same process. CP2000 comes out of the Automated Underreporter (AUR) program matching third-party income documents (W-2s, 1099s) against the return; it is a computer-generated proposal, nothing has been assessed, and the taxpayer is negotiating a specific dollar adjustment. CP75 opens an actual correspondence examination of eligibility for specific credits, run by Exam rather than AUR, and it doesn't propose a number up front — it holds the refund and asks for documentary proof that the taxpayer qualifies at all.

The practical stakes differ accordingly. A taxpayer who treats CP2000 casually risks a wrong income adjustment; a taxpayer who treats CP75 casually — ignoring it, or sending in a vague explanation instead of the specific documents each enclosed form lists — risks losing a refundable credit outright and, if the IRS's eventual determination goes further and finds the claim was recklessly or fraudulently made, losing the ability to claim it again for two or ten years. That second consequence is real but conditional, which is exactly why it belongs in the client conversation accurately rather than as a blanket scare tactic.

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