As it does each year, the IRS issued updates to certain procedural matters, in Rev. Procs. 2022-1, 2022-2, and 2022-3. The first one is the revised procedures for issuing letter rulings; it was modified by Rev. Proc. 2022-10 and amplified by Rev. Proc. 2022-19. The significant changes from Rev. Proc. 2021-1 are:

• Taxpayer identification numbers (TINs) and contact information are required for all interested parties;
• Electronic signatures are allowed on Form 2848, Power of Attorney and Declaration of Representative.
• Income tax determination requests to the Small Business/Self-Employed Division can only be submitted electronically;
• The address for paper requests has been consolidated; and
• The fee for additional time to make an S election is the same as the fee for Sec. 9100 relief.

Sec. 32: Earned income tax credit

Nonfilers can claim the EITC and other credits: Rev. Proc. 2022-12 was issued Jan. 24, 2022. It allows nonfilers to claim the EITC, the child tax credit, and/or the recovery rebate credit for the 2021 tax year. A special procedure applies to certain individuals who (1) were not required to file a tax return for 2021; (2) had gross income for the year less than the applicable standard deduction; (3) had no adjusted gross income (AGI); and (4) had not already filed a 2021 return. These nonfilers can use a prescribed method to file a return electronically to claim the credits. The revenue procedure also allows nonfiling individuals to file a simplified return for 2021 on paper or electronically to claim the child tax credit and/or the rebate recovery credit.

EITC FAQs: On March 2, 2022, the IRS issued a fact sheet on the EITC for tax year 2021 that answered 17 frequently asked questions (FAQs). The EITC was expanded for 2021, and more taxpayers became eligible for it.

On May 25, 2022, the FAQs were updated. Q&A-15 explained that taxpayers could use their 2019 earned income to figure the 2021 EITC. Higher earned income in 2019 would allow a higher credit. Taxpayers who filed no returns for 2020 or 2021 previously or did not claim the EITC on the previously filed return were directed to file a late or amended return based on 2019 earned income.

Dependency is necessary for the EITC: In one Tax Court case, the taxpayerhad three children with his former spouse. The marital separation agreement awarded full custody of the children to the former spouse, although the children spent specified weekends and four weeks during the summer with the taxpayer. The taxpayer, who did not include with his return a Form 8332, was not allowed a dependency exemption for one of the three children, whom he claimed as a dependent and as a qualifying child for the EITC. His EITC claim was likewise disallowed for one tax year and partially disallowed for another.