Every so often a client asks me why I want so much documentation concerning their dependents. The answer is because over half of all IRS audits involve tax credits that arise from claiming dependents (the Earned Income Tax Credit, the Child Tax Credit, the Additional Child Tax Credit, the American Opportunity Tax Credit, Head of Household Status and now the Other Dependent Tax Credit) and the IRS has massively expanded their enforcement program in the past couple years. I do it to protect my clients. I derive no enjoyment from asking for this extra documentation. In fact I deeply resent having to do it. However, I believe that clients come to me not only to get them the biggest refund that the law allows, but also to keep them safe in the process. Reassuring the IRS that there is good documentation for a tax credit that they like to audit is perhaps the single best thing I can do to protect my clients.
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