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his update surveys recent federal engaged in a “specified service trade or and claimed the child tax credit. The
Ttax developments involving indi- business” for purposes of Sec. 199A is an father provided more than half of both
area for which rulings will not ordinarily children’s support. Although the father
viduals. It summarizes notable cases,
be issued.1 did not attach to his return Form 8332,
rulings, and guidance on a variety of
Release/Revocation of Release of Claim to
topics issued during the 12 months Sec. 24: Child tax credit Exemption for Child by Custodial Par-
ending October 2022. The update was Tiebreaker for credits tied to ent, or other required documentation to
written by members of the AICPA dependents: In Gopi,2 the Tax Court show his entitlement to the credit, he
Individual & Self-Employed Tax denied the additional child tax credit, did provide it upon examination and was
earned income tax credit (EITC), head- granted the credit for one child.5
Technical Resource Panel. The items
of-household status, and dependency for
are arranged in Code section order.
two grandchildren of the taxpayer. The Sec. 32: Earned income tax
As it does each year, the IRS issued taxpayer’s daughter moved in with the credit
updates to certain procedural matters, in taxpayer and did not reveal that she was Nonfilers can claim the EITC
Rev. Procs. 2022-1, 2022-2, and 2022-3. married. The taxpayer supplied all of the and other credits: Rev. Proc. 2022-12
The first one is the revised procedures grandchildren’s support except for some was issued Jan. 24, 2022. It allows
for issuing letter rulings; it was modified tax-free benefits provided to his daugh- nonfilers to claim the EITC, the child
by Rev. Proc. 2022-10 and amplified ter. He was unaware that his daughter tax credit, and/or the recovery rebate
by Rev. Proc. 2022-19. The significant was married and had filed a joint return credit for the 2021 tax year. A special
changes from Rev. Proc. 2021-1 are: with her husband for the tax year in procedure applies to certain individuals
■ Taxpayer identification numbers question that also claimed the same chil- who (1) were not required to file a tax
(TINs) and contact information are dren as dependents as the taxpayer did. return for 2021; (2) had gross income for
required for all interested parties; Although the taxpayer qualified for all the year less than the applicable standard
■ Electronic signatures are allowed on of the credits and dependency exemp- deduction; (3) had no adjusted gross
Form 2848, Power of Attorney and tions, the tiebreaker rule applies when income (AGI); and (4) had not already
Declaration of Representative. more than one individual claims the filed a 2021 return. These nonfilers can
■ Income tax determination requests to same child or children as dependents, use a prescribed method to file a return
the Small Business/Self-Employed i.e., which individual is the parent of the electronically to claim the credits. The
Division can only be submitted qualifying child or children.3 Therefore, revenue procedure also allows nonfiling
electronically; the Tax Court held, the grandfather individuals to file a simplified return for
■ The address for paper requests has did not qualify for the child-related 2021 on paper or electronically to claim
been consolidated; and tax benefits. the child tax credit and/or the rebate
■ The fee for additional time to make Noncustodial parent allowed recovery credit.
an S election is the same as the fee credit: In Hicks,4 the taxpayer and his EITC FAQs: On March 2, 2022,
for Sec. 9100 relief. children’s mother never married but had the IRS issued a fact sheet on the EITC
Revised procedures for furnishing entered into a series of agreements about for tax year 2021 that answered 17 fre-
technical advice (Rev. Proc 2022-2) who could claim dependency exemp- quently asked questions (FAQs).6 The
were updated for the same electronic tions. Each parent was to claim one of EITC was expanded for 2021, and more
signature requirements as in Rev. Proc. the two children each year. The mother taxpayers became eligible for it.
2022-1. Annually, the third revenue had custody for more than half of each On May 25, 2022, the FAQs were
procedure issued updates the “no rule” year but lived with her mother and did updated. Q&A-15 explained that tax-
listing. Rev. Proc. 2022-3 was amplified not file a tax return for 2014, the year in payers could use their 2019 earned in-
and modified by Rev. Proc. 2022-19, question. The taxpayer and the children’s come to figure the 2021 EITC. Higher
amplified by Rev. Proc. 2022-28 and mother lived apart from one another. earned income in 2019 would allow a
Rev. Proc. 2022-32. The 2022 version The grandmother (the mother’s mother) higher credit. Taxpayers who filed no
indicates that whether a taxpayer is claimed both children as dependents returns for 2020 or 2021 previously or

1. Rev. Proc. 2022-3, §4.01(19). 4. Hicks, T.C. Memo. 2022-10.
2. Gopi, T.C. Summ. 2021-41. 5. See Sec. 152(e)(2).
3. Sec. 152(c)(4)(A)(i). 6. Fact Sheet 2022-14, updated by Fact Sheet 2022-30.

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