Samuel M. Nachfolger, AFSP, CAA
samuel@borderlesstaxes.com
The Expanded Child Tax Credit for 2021 and US Expatriate families[1] Updated 5/6/2022
Summary: The IRS (Internal Revenue Service) has distributed monthly payments, $250-$300 per child, to low- and moderate-income families, which started July 15, 2021. The law excluded US expat families from receiving these payments. However, many expat families have received these payments in error, and may be allowed to keep part or all of them.
Much excitement has been generated by the passing of the American Rescue Plan Act of 2021 (ARPA), specifically about the Expanded Child Tax Credit (ECTC). This tax credit will be $3600 per year for children under 6 years of age, and $3000 per year for children under 18.
Originally designed to help families rehabilitate from the COVID-19 economic crisis, the Biden Administration and many prominent Democrats are planning on making this expansion permanent.
Though the bill to extend this credit was part of the now-cancelled Build Back Better plan, Democrats are still hoping to find a way to push it through.
House Democrats are now seeking to extend the expanded child tax credit through 2025, to push President Biden’s “American Families Plan”, which seeks to permanently extend these monthly payments.
President Biden had instructed the IRS to begin distributing monthly advance payments of this credit, starting from July 15, 2021, based on 2020 or 2019 tax return data. The monthly payments were $300 for children under 6, and $250 for children under 18. For families with multiple children, this added up to quite a respectable sum per month. The IRS had set up an online portal for those who had wished to add children who weren’t listed on their previously filed return, such as newborn babies. It also enabled parents to opt-out of the advance payments, and to receive a single lump sum when filing their 2021 tax return, if preferred.
An important, critical factor of this new credit is that it has been made fully refundable. Previously, the Child Tax Credit (CTC) was $2000 per child, but only $1400 was refundable (possible to actually receive as a payment, not just a tax credit). Now, the full $3600 or $3000 will be fully refundable.
In addition, the old child tax credit had a minimum income threshold of $2500, with the rest of the credit available as a refundable 15% credit on the remaining earned income. Now, there is no income threshold, and no requirement for any earned income in order to claim the credit.
In addition to COVID-19 relief, the expansion is hailed as rectifying the previous inequity of very poor families receiving less refundable credit than more affluent families.
The new credit also has new upper thresholds for claiming the credits. These thresholds are $75,000 for single filers, $112,500 for head of household filers, and $150,000 for married filing joint filers. For more affluent families, the credit plateaus at its prior-law level of $2,000 per child and phases out when income exceeds the upper threshold of $200,000 ($400,000 for married joint filers).
This new credit is heralded as a great help to end child poverty in the United States. The changes to the child tax credit proposed by the act would lift 4.1 million children out of poverty, cutting the overall poverty rate by about 40%, according to experts.
However, for US expats, there is a big caveat.
The new law specifically excludes US taxpayers who aren’t residents of the US at least 6 months of the year[2]. The law refers to the restrictions of Section 32, which pertain to the Earned Income Credit (EIC). So, just as the EIC is unavailable to US citizens who live overseas most of the year, the same restriction will be there for the expanded child tax credit. For now, these unfair, discriminatory restrictions on US taxpayers living overseas are the current law. Unless Congress votes to amend Section 32, which is highly unlikely at this point, this restriction will remain.
The American Citizens Abroad (ACA)[3], an organization which lobbies for expat rights, has recently begun lobbying[4] Congress to have the law amended to include eligibility for expat families to claim the expanded child tax credit. There has not been any success as yet.
President Biden had instructed the IRS to distribute these payments to all eligible families. Families which have provided a US mailing address on their tax return have automatically received these payments, while those who have provided foreign addresses generally have not. There have been some reports of those who had written foreign addresses on their tax return who have gotten these checks as well.
Many families living abroad have provided a US address on their tax return, and in fact IRS agents have recommended it to many people. This is done to minimize the risk of loss of mail during international transit, and to ensure speedy receipt of notices. Many have family or friends receiving their IRS correspondence for them while they are living overseas. This practice is legitimate, so long as the families aren’t trying any deception in order to claim credits to which they are not entitled.
While written specific IRS literature has not encouraged nor placed any limitation on expats receiving their IRS correspondence at a US address, the agency has clearly stated that a permanent mailing address is not required. This has been stated in writing pertaining to the recommendation of the IRS that homeless persons use an address of a friend or relative to receive IRS correspondence[5].
In fact, the IRS requires listing a US address in order to claim the EIC on a tax return, even in the case of a family which had recently moved overseas, and had in fact been in the US the requisite part of the year. As such, it seems an important method used by the IRS computer system to determine compliance with the Section 32 provisions is providing a US address on the tax return, and further, this seems be the determining factor for the distribution of the Expanded Child Tax Credit as well.
This filtering method has led to absurd situations. For instance, in the case of a family having recently moved overseas which would like to receive their IRS correspondence at their new address, they would not be able to claim the EIC. The US address is still used by the IRS computer system as a determining factor, and they would have to list a US address on the return in order to claim it.
Many expat families have erroneously received these advance payments. Will they be allowed to keep the payments? Will they have to return all or part of these amounts, when filing their 2021 tax return? This seems unclear.
Could expat families really have been required to unenroll from these payments? The IRS online system if very difficult, and sometimes impossible, for an expat to set up. Calling the IRS and actually getting through to an agent could be almost impossible, as well. It would be unfathomable that the IRS could have expected these families to have been constantly up to date on this dynamic situation.
Safe Harbor clause to the rescue?
The ARPA bill specifically provided a safe harbor[6] for certain families. This was intended to restrict the ability of the IRS to ask for repayment of unqualified child tax credit advance payments. This safe harbor provides an exception for these families from having to repay the advance payments, even though they actually weren’t qualified to receive them to begin with.
This safe harbor has also been called “repayment protection” on IRS Letter 6419, which summarizes advance payments received, as well as in IRS FAQs (Frequently asked questions).
This clause was obviously designed to provide assurance that low-income families wouldn’t end up in debt, having to repay a credit received which had already been spent on essential needs.
If parents filing jointly have not exceeded $60,000 MAGI (Modified Adjusted Gross Income), they would be allowed to keep up to a full $2000 per child because of the safe harbor provision. Up to $120,000 MAGI would receive a reduced, phaseout amount. The safe harbor law text is quite general, and does not make an exception for families living overseas.
So, it seems that families living abroad should be entitled to the same safe harbor qualification as others. For instance, the same as divorced parents whose child’s custody status had changed hands. This would also be the case if the child had died during 2021, or even 2020, and payments had erroneously been made to the parents.
The main intention of the safe harbor provision could have been for cases of change of custody, which would be the most common reason, but should apply to other situations as well.
Both of these cases would have had an “excess in the number of qualifying children”, as opposed to the previously determined advance amount.
These families could definitely fall into the category of having to pay back a credit already spent, possibly going into debt. This would defeat the purpose of the expanded child tax credit, which was to provide assistance to low-income families; in fact, this situation could leave them worse off than without it.
It seems unknown whether the IRS would rule that US expat families in such case would be considered having had a “net change in qualifying children”, or another, unrelated change of circumstances which would preclude any utilization of the safe harbor benefit.
The IRS has published an FAQ post[7] which indirectly addresses this matter, dated 6/14/2021:
A5. You qualify for full repayment protection and won’t need to repay any excess amount if your main home was in the United States for more than half of 2021 and your modified adjusted gross income (AGI) for 2021 is at or below the following amount based on the filing status on your 2021 tax return:
$60,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
$50,000 if you are filing as head of household; and
$40,000 if you are a single filer or are married and filing a separate return.
Your repayment protection may be limited if your modified AGI exceeds these amounts or your main home was not in the United States for more than half of 2021.”
The guidance of the last sentence of the FAQ is very unclear. It states that the repayment protection “may be limited” if “your main home was not in the United States for more than half of 2021”, but does not explicitly exclude expats from repayment protection. What are these limitations, and how do they work? This remains unexplained.
This leaves us in quite a quandary. The general text of the law seems to allow expats to claim repayment protection; however, the IRS FAQ refers to some sort of possible “limitations” which are actually nonexistent in the text of the law!
The other area of limitation referred to in the FAQ is if modified AGI exceeds the stated amounts, which actually is addressed in the law as being reduced according to a certain ratio, which is the specific limitation. Not having a main home in the United States, however, was never mentioned as a possible reason for having certain repayment protection limitations.
Until now, there had been a lack of clarity whether expats were eligible for repayment protection; now there appears to be a third possibility, that is, whether certain “limitations” might apply. What should be the plan of action?
First, the authority and reliability of the IRS FAQs should be addressed.
Originally, IRS FAQs have carried no legal authority[8] unless published in the Internal Revenue Bulletin (IRB).
However, according to an October 2021 announcement by the IRS[9], Fact Sheet FAQs now carry more authority, and can be used to show that a taxpayer had relied on official guidance in good faith[10].
According to acclaimed expat tax attorney Virginia La Torre Jeker, J.D.[11]:
“Is it a “Fact Sheet FAQ”?
So-called “Fact Sheet FAQs” may help abate tax penalties even though not published in the IRB (Internal Revenue Bulletin). The IRS stated that FAQs that are published in a Fact Sheet that is linked to an IRS news release will be considered authority for purposes of the exception to accuracy-related penalties that applies when there is substantial authority for the treatment of an item on a return. See Treas. Reg. § 1.6662-4(d) for more information.”
These FAQs on the Child Tax Credit and Advance Child Tax Credit have actually been published in an official IRS FAQ Fact Sheet, dated January 2022[12].
So, this FAQ suggesting the eligibility of expats could be authoritative for the purposes of protection against penalties. It gives us a clue that there is room to be lenient for expats, being that it does not explicitly exclude expats from claiming repayment protection; rather it merely alludes to certain non-existent “limitations”. Being that these limitations do not actually exist, it would imply that expats actually could claim repayment protection in its entirety, as long as their MAGI didn’t exceed the requisite amounts.
Another FAQ post addresses the inverse of the aforementioned question:
“Q H4. How do I know if I don’t qualify for the repayment protection for filers based on their income during 2021? (added June 14, 2021)
A4. You won’t qualify for any repayment protection if your modified adjusted gross income (AGI) is at or above the amounts listed below based on the filing status on your 2021 tax return. • $120,000 if you are married and filing a joint return or if filing as a qualifying widow or widower; • $100,000 if you are filing as head of household; and • $80,000 if you are a single filer or are married and filing a separate return.”
This FAQ makes no mention of expats, and seems to imply that they would be eligible, being that they aren’t listed as a disqualified category.
On January 11, 2022, the IRS added some new FAQs, including one that specifically addresses parents who didn’t live in the US:
“Q G6. I filed my 2020 tax return with a U.S. address although my child and I do not live in the United States. I received Letter 6417 at my U.S. address stating that the IRS will begin to disburse advance Child Tax Credit payments to me. What could I have done? (updated January 11, 2022)
A6. You were not entitled to advance Child Tax Credit payments. You may be eligible to claim the Child Tax Credit when you file your 2021 tax return, but may not be able to claim all $3,000 or $3,600 per qualifying child because your main home will not be in the United States for more than half of 2021. The advance payments we sent to you might have exceeded the amount of Child Tax Credit that you will be allowed to claim on your 2021 tax return.”
Another relevant FAQ:
“Q H3. Will I need to repay advance Child Tax Credit payments back to the IRS if they were greater than the Child Tax Credit amount that I am allowed on my 2021 tax return? (updated January 11, 2022)
A3. Maybe. If you qualify for the repayment protection described in this Topic H, you will be excused from repaying some or all of the excess amount. If you do not qualify for repayment protection, you will need to report the entire excess amount on your 2021 tax return as additional income tax. This additional income tax will reduce the amount of your tax refund or increase your total tax due for 2021.”
Again, expats have not been specifically excluded from claiming repayment protection. So, it could be argued that they do qualify.
Another way to analyze the above-mentioned FAQ answer:
"A5. You qualify for full repayment protection and won’t need to repay any excess amount of your advance Child Tax Credit payments if your main home was in the United States for more than half of 2021...Your repayment protection may be limited if your modified AGI exceeds these amounts or your main home was not in the United States for more than half of 2021."
Quite a contradiction - first it says clearly that if your home was outside the US you don't qualify for full repayment protection. Then at the end it says "Your repayment protection may be limited if ... your main home was not in the United States for more than half of 2021."
At first glance it looks as if the first part excludes expats and the second part includes them, at least under certain conditions!
But with more analysis, concentrating on the words "full" and "limited":
It sounds as if expatriates actually do qualify, but with some sort of limitation - they don't qualify for full repayment protection, but only limited. Which is completely absurd - there is no such law, and these specifics aren't printed anywhere, not even in the FAQs. The most probable answer is that any such limitations vaguely exist in the confused IRS FAQ author's mind.After thinking the matter through, it is entirely possible the IRS could admit to some mistake in the FAQ as written and could amend the FAQ. FAQs are revised very often!
Did the IRS really mean to write that expatriates don't qualify at all? Or was the "limited" part a mistake, and they actually do qualify, in full? Either way, the law makes no mention of this situation. So, the arguments in favor of the expat parents still stand.
The vague instructions[13] to Form 8812, Credits for Qualifying Children and Other Dependents, don’t provide any clarity.
They make no mention of whether expat parents can qualify for repayment protection. In case of payments received for children who are being claimed on both the 2020 and 2021 returns, and advance payments had been paid in error, no guidance has been given. A good argument can be made that an expat’s child claimed on a 2021 tax return would be considered just as a child not claimed on the 2021 return at all.
In fact, a fortiori argument can be made. If a child who was not claimed at all on a 2021 tax return can still cause the parent who had previously claimed them as a dependent to be able to qualify for repayment protection, surely a child who actually was claimed on the 2021 return would qualify the parent for repayment protection. How could someone who didn’t claim a child on a return be entitled to more protections than someone who actually claimed them? It must be inferred that both types of parents would be entitled to equal protections.
A differing point of view, to quote one expert[14]:
“The ARP (American Rescue Plan) includes a “safe-harbor” provision to preclude the potential for the IRS clawing back overpayments when a claimant files their taxes. For single filers, heads of households, and joint filers with incomes of less than $40,000, $50,000, and $60,000, respectively, ARP provides a $2,000 allowance, per net change in qualifying children, against any excess payments. This safe-harbor is reduced in proportion to a taxpayer’s actual income and 200 percent of their applicable safe-harbor threshold. The ARP does not provide a similar harbor for changes in income or other similar changes in taxpayers’ circumstances.”
A colleague has pointed out a dissenting argument:
“It seems that the repayment protection is when there is a change in qualifying children. However, before you get started altogether, the parents must qualify. If the parents do not live 6 months in the US then the parents do not qualify for advance CTC - period. Only once the parents qualify do we examine the status of the children.”
However, this is what would be the unbelievable outcome:
US based parents of a child who died in mid 2020, and filed their 2020 return with the child listed as a dependent, would automatically receive the advance CTC payments. When filing their 2021 return, they would qualify for the safe harbor, even though the child wasn't even alive at all in 2021.
However, parents living overseas, whose child is alive and well, and had received the advance child tax credit in error, would not qualify for the safe harbor at all, since they don't qualify at all for the advance CTC?!
It sounds absurd, and certainly not what Congress had in mind when implementing the safe harbor, which was to avoid undue hardship on families to repay a payment received, if their income was very low. Unless you say that their intent was specifically to disallow making things easier for the expat low-income families, which is hopefully far-fetched.
There is something written in IRS Revenue Procedure[15] 2022-12 which indirectly addresses the matter. This Procedure was written to address another matter, simplified returns for non-filers. One sentence happens to address our matter.
"The increase in tax will be attributable to the individual’s excess qualifying children if the individual’s main home was in the United States for more than half of taxable year 2021[16]."
This Revenue Procedure views the eligibility of the safe harbor as only for those who lived in the US for more than half of 2021.
However, this Procedure was really addressing another matter, and this view came in sort of happenstance. So, I don't think this was really intended to be a direct ruling on expats claiming the safe harbor, and the doubt still remains.
In addition, the authoritativeness of revenue rulings and procedures must be addressed. Can the IRS really make up its own definitions of the IRC as they go along, without any congressional approval?
According to the IRS, "Authority of Rulings and Procedures:[17] Rulings do not have the force and effect of Treasury Department Regulations, but they may be used as precedents. In applying published rulings, the effects of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered. Caution is urged against reaching the same conclusion in other cases, unless the facts and circumstances are substantially the same."
So, Revenue Rulings and Procedures are not exactly law, and can’t be treated as such. They are generally meant to be informal guidance, but when Congress delegates to Treasury to issue regs or guidance, that gives the IRS a long leash.
In fact, one scholar of law calls them "No Man's Land of Tax Code Interpretation[18]". A very unclear question remains, and is constantly disputed in courts: does IRB guidance (published revenue rulings and procedures) carry the force of law?
There is one source which does address our issue directly, a report published for the Congressional Research Service[19]:
“The safe harbor does not apply in cases where excess payments arise from changes in income, marital status, or principal place of abode between the reference year and 2021.”
In any case, the reports of the Congressional Research Service aren't law, and only reflect the way the individual author[20] understood the law. These reports to Congress are made to summarize and explain laws in an easier to read format than law texts. They bear even less weight than any IRS FAQ - in fact, they bear no weight for protection against penalties, in the case a report publishes a lenient interpretation of the law[21].
So, the above arguments still stand, and it may be argued that the correct intent of the law was to include expats in the safe harbor provision.
Conclusion
I have come to the conclusion that expats actually do qualify for the safe-harbor/repayment protection, and the IRS should honor it without any problems. Though this is not completely free from doubt.
After utilizing the safe harbor, the expat taxpayer will not be able to claim the standard refundable child tax credit based on earned income, which expat taxpayers are entitled to, if they had already claimed repayment protection of $1400 or more, per child. The amount claimed for repayment protection would be now looked at as the standard refundable child tax credit.
Tax filing software has not provided specific functionality to claim the safe harbor under these conditions, so this is how it should be done:
While the box on the Basic Information worksheet about US residency would have to be checked as “No”, an override of the tax due (which the program would have automatically calculated) would have to be made in line 28a of Part III of Form 8812, in order to subtract the amounts covered under the safe harbor. Line 30 and 31, number of qualifying children, will also have to be overridden to list the actual number of qualifying children. This amount can be up to $2000 per child, which would otherwise be included in the amount of tax due. In the case of an expat, they would be claiming the full amounts of the advance credit, which would be $1800 for a child under six years old, and $1500 for a child over six but under eighteen. Line 40, additional tax, may also have to be overridden.
To be sure of not running into any problems, Form 8275, Disclosure Statement, should be attached to the return, explaining the position taken. This form is used to disclose items or positions that are not otherwise adequately disclosed on a tax return to avoid certain penalties. Filing a disclosure, together with the fact that the IRS FAQ suggests that expats may be eligible, should provide a double protection against risk of penalties.
However, there is still some risk that the refund/tax due amount may be adjusted either automatically by the IRS computer, or after being manually selected for review, by an IRS agent who is not cognizant of the eligibility of expats for the safe harbor/repayment protection. It may also possibly increase the risk of being selected for an audit. In such a case, the taxpayer may need to appeal the decision, and may even have to bring the case to the US Tax Court.
In any case, the old child tax credit will clearly still be available for US expats, with the $2000 tax credit/$1400 refundable credit.
To summarize: In my view, although not free from doubt, an expat may claim the safe harbor/repayment protection for advance child tax credit payments erroneously paid by the IRS, according to the income limitations based on MAGI. Though it would be a good idea to file a Form 8275 Disclosure Statement along with the return. It would be advisable for taxpayers to utilize the services of an accountant well versed in this specialized procedure, in order to ensure that everything had been filed correctly.
This has been the result so far:
I have tried utilizing the above-mentioned procedure to try and have expats processed for repayment protection. However, the IRS computer has automatically recalculated the tax due (as expected) and taxpayers have received letters showing that they owe the amounts of the advance payments received, unless the regular refundable child tax credit would cover the whole amount. Letters have been mailed to the IRS explaining the situation according to the reasoning of this paper, and requesting an adjustment. However, as of now, no reply has yet been received. Taxpayers and their advisors should take this into account, and decide if they think the trouble is worth it.
It does not seem that it would be cost effective to bring such cases to the Tax Court. Since this is the case, taxpayers may be forced to repay the advance amounts, if the IRS response is not satisfactory.
A closing quote[22]:
“One can, of course, make talmudic dissections of everyday language to find hidden and profound implications. Unless statutory language is so clear that it compels a specific result, however, our task in statutory construction is to "ascertain the congressional intent and give effect to the legislative will." Philbrook v. Glodgett, 421 U.S. 707, 713, 95 S.Ct. 1893, 1898, 44 L.Ed.2d 525 (1975).”
Further Reference:
See https://crsreports.congress.gov/product/pdf/IN/IN11613 and https://crsreports.congress.gov/product/pdf/R/R46900 for a more detailed explanation of the new expanded child tax credit.
[1] Special thanks to International US Tax Specialist, Virginia La Torre Jeker, J.D., and Yaakov Bodenheim, EA, for taking the time to review this article.
[2] Text of the law (HR 1319 https://www.congress.gov/bill/117th-congress/house-bill/1319):
“PART 2—CHILD TAX CREDIT SEC. 9611. CHILD TAX CREDIT IMPROVEMENTS FOR 2021. (a) IN GENERAL.—Section 24 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: ‘‘(i) SPECIAL RULES FOR 2021.—In the case of any taxable year beginning after December 31, 2020, and before January 1, 2022— ‘‘(1) REFUNDABLE CREDIT.—If the taxpayer (in the case of a joint return, either spouse) has a principal place of abode in the United States (determined as provided in section 32) for more than one-half of the taxable year or is a bona fide resident of Puerto Rico (within the meaning of section 937(a)) for such taxable year— ‘‘(A) subsection (d) shall not apply, and ‘‘(B) so much of the credit determined under subsection (a) (after application of subparagraph (A)) as does not exceed the amount of such credit which would be so determined without regard to subsection (h)(4) shall be allowed under subpart C (and not allowed under this subpart).”
[3] https://www.americansabroad.org/
[4] https://www.americansabroad.org/media/files/news/e8046297/aca-ctc-letter-211006.pdf
[5] See “Permanent address not required” https://www.irs.gov/newsroom/those-experiencing-homelessness-can-get-economic-impact-payments-and-other-tax-benefits-permanent-address-not-required
[6] Text of the Safe Harbor provision: https://www.law.cornell.edu/uscode/text/26/24
“(2) EXCESS ADVANCE PAYMENTS.—
“(A) IN GENERAL.—If the aggregate amount of payments under section 7527A to the taxpayer during the taxable year exceeds the amount of the credit allowed under this section to such taxpayer for such taxable year (determined without regard to paragraph (1)), the tax imposed by this chapter for such taxable year shall be increased by the amount of such excess. Any failure to so increase the tax shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).
“(B) SAFE HARBOR BASED ON MODIFIED ADJUSTED GROSS INCOME.—
“(i) IN GENERAL.—In the case of a taxpayer whose modified adjusted gross income (as defined in subsection (b)) for the taxable year does not exceed 200 percent of the applicable income threshold, the amount of the increase determined under subparagraph (A) with respect to such taxpayer for such taxable year shall be reduced (but not below zero) by the safe harbor amount.
“(ii) PHASE OUT OF SAFE HARBOR AMOUNT.—In the case of a taxpayer whose modified adjusted gross income (as defined in subsection (b)) for the taxable year exceeds the applicable income threshold, the safe harbor amount otherwise in effect under clause (i) shall be reduced by the amount which bears the same ratio to such amount as such excess bears to the applicable income threshold.
“(iii) APPLICABLE INCOME THRESHOLD. —For purposes of this subparagraph, the term ‘applicable income threshold’ means—
“(I) $60,000 in the case of a joint return or surviving spouse (as defined in section 2(a)),
“(II) $50,000 in the case of a head of household, and
“(III) $40,000 in any other case.
“(iv) SAFE HARBOR AMOUNT. —For purposes of this subparagraph, the term ‘safe harbor amount’ means, with respect to any taxable year, the product of—
“(I) $2,000, multiplied by
“(II) the excess (if any) of the number of qualified children taken into account in determining the annual advance amount with respect to the taxpayer under section 7527A with respect to months beginning in such taxable year, over the number of qualified children taken into account in determining the credit allowed under this section for such taxable year.”
[7] https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-topic-h-reconciling-your-advance-child-tax-credit-payments-on-your-2021-tax-return
[8] See blog post written by Virginia La Torre Jeker, J.D.:
https://us-tax.org/2021/10/28/irs-made-a-big-announcement-so-can-a-taxpayer-now-rely-on-irs-faqs/
https://www.angloinfo.com/blogs/global/us-tax/legal-weight-of-irs-pubs-info-faqs-zilch/
“Astute tax professionals have known for some time that unless an IRS pronouncement is published in the IRB (Internal Revenue Bulletin), its legal weight is zero. That’s right, tax guidance published on IRS.gov, the official IRS website, holds no legal authority. Instead, binding rules can be found only in an obscure collection of more than 2000 pages per year – the Internal Revenue Bulletin.
“In fact, on May 18, 2017 IRS issued a memorandum to all of its examiners reminding them that FAQs and other items posted on the IRS website that have not been published in the Internal Revenue Bulletin (IRB) are not legal authority.”
[9] https://www.irs.gov/newsroom/irs-updates-process-for-frequently-asked-questions-on-new-tax-legislation-and-addresses-reliance-concerns
[10] https://www.irs.gov/newsroom/general-overview-of-taxpayer-reliance-on-guidance-published-in-the-internal-revenue-bulletin-and-faqs
“These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. Accordingly, these FAQs may not address any particular taxpayer's specific facts and circumstances, and they may be updated or modified upon further review. Because these FAQs have not been published in the Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer's case, the law will control the taxpayer's tax liability. Nonetheless, a taxpayer who reasonably and in good faith relies on these FAQs will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax. Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so.”
[11] https://us-tax.org/2021/10/28/irs-made-a-big-announcement-so-can-a-taxpayer-now-rely-on-irs-faqs/
[12] FS-2022-03, January 2022 https://www.irs.gov/pub/newsroom/fs-2022-03.pdf
[13] https://www.irs.gov/pub/irs-pdf/i1040s8.pdf
“Repayment protection. Repayment protection is available to taxpayers whose advance child tax credit payments took more qualifying children into account than the taxpayers claim on their 2021 tax return. Taxpayers subject to the repayment protection may owe no additional tax or have the additional tax amount reduced by the repayment protection amount. The full repayment protection amount is $2,000 per child not claimed on your tax return. The amount of the repayment protection will be reduced or phased out based on your modified adjusted gross income (AGI).”
[14] https://www.americanactionforum.org/insight/the-advanceable-child-tax-credit-in-the-american-rescue-plan-act/
[15] A revenue procedure is an official statement of a procedure published in the Bulletin that either affects the rights or duties of taxpayers or other members of the public under the Internal Revenue Code and related statutes, treaties, and regulations or, although not necessarily affecting the rights and duties of the public, should be a matter of public knowledge. – Rev. Proc. 89-14, 1989-8 I.R.B. 20
[16] Full paragraph:
"The safe harbor amount reduces to zero as a taxpayer’s modified AGI exceeds certain income thresholds. See § 24(j)(2)(B)(ii).Because the income thresholds of this revenue procedure are lower than those of the safe harbor, an individual within the scope of this revenue procedure will qualify for the full safe harbor and will not have to repay any increase in tax if the increase in tax is attributable to the individual’s excess qualifying children. The increase in tax will be attributable to the individual’s excess qualifying children if the individual’s main home was in the United States for more than half of taxable year 2021."
[17] https://www.irs.gov/irm/part4/irm_04-010007#idm140584504346832
[18] https://scholarship.law.umn.edu/cgi/viewcontent.cgi?article=1210&context=faculty_articles
[19] https://crsreports.congress.gov/product/pdf/R/R46900 See pp.15-16, FAQ #B10: How does the “safe harbor” work?
[20] In this report the author was Margot L. Crandall-Hollick, Specialist in Public Finance.
[21] See Disclaimer, p. 44 of above referenced report:
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
[22] https://casetext.com/case/church-of-scientology-of-cal-v-irs-3
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