USA Issue with EITC

[Yoel]

I would like to have your opinion about the following issue. Thanks in advance.

I lost the 2015 EITC because the preparer on Liberty Tax didnt know the changes made in Dec 2015 and advised me wrong on this matter. The changes dont allow you to claim the EITC retroactive. They say I would loss my 2015 EITC anyway cause I got my kids SSN in 2016, but the law includes an exception fpr 2015 that says that you can claim the EITC if the SSN are issue before the due date of the returning including any valid extension, so if they had advised me to do an extension, instead of filing in feb 2016, I think I would have no issue.

https://www.congress.gov/114/plaws/publ113/PLAW-114publ113.pdf (pag 841)

(2) EXCEPTION FOR TIMELY-FILED 2015 RETURNS.—The amendment made by this section shall not apply to any return of tax (other than an amendment or supplement to any return of tax) for any taxable year which includes the date of the enactment of this Act if such return is filed on or before the due date for such return of tax.

Chronological facts.
March 2015. I moved to USA.
August 2015: My wife and me got our SSN. We didnt get the SSN of our 3 kids.
August 2015. I started working.
Dec 2015. Changes to IRS law are passed and retroactive EITC are not longer allowed without SSN.
Feb 2016: We filed our tax. We claim child credit only with my kids ITIN. The preparer told us that we could file the tax and we had 3 years to make an amended and claim the EITC. They knew we will get the kids SSN by that year. They knew nothing about the changes made recently.
July 2016. We got our kids SSN.
Oct 2016. Liberty Tax ammended our return claiming the EITC.
Nov 2016. The ISR processed my ammended, but didnt approved my EITC.

 

[Cherie CPA @firm1040]

In my opinion, they should have filed an extension because it would have been considered a timely filed return. However, looks like you're out of luck.

 

[Yoel]

Thanks a lot.

I just wanted to confirm I was right. As I only worked 6 month in that year and with 5 in my family, I was entitled to almost 6K. I think I will take them to the small claim court. It is a 6K vs 200. They have a policy but it looks like it only covers penalties due to their mistakes. In my case I had a loss not a penalty. But they do promise the largest possible refund, so I think I may use that argument.

Accuracy Guarantee
Our offices will give you the most accurate return and the largest possible refund you are entitled to receive. If the office makes an error in the preparation of your return that results in penalties and interest, the office will reimburse you for the associated penalty and interest initially assessed.

 

[Cherie CPA @firm1040]

You can try but I don't think you'll win.