TIGTA made recommendations regarding the use of individual tax identification numbers (ITINs) with respect to refundable tax credits such as the child tax credit. TIGTA also recommended that the IRS develop a new process to prevent erroneous claims for the earned income credit. • The IRS issued guidance providing the procedure for electing under Sec. 108(i) to include income from indebtedness discharged in a reacquisition of a debt instrument in gross income ratably over a five-year period. • The IRS issued advice to its employees regarding the determination of whether a taxpayer can claim a dependency exemption for a noncustodial child, and several courts ruled on this issue in specific situations. • The IRS rejected a Tax Court position and advised that indebtedness incurred to acquire, construct, or substantially improve a residence that exceeds $1 million is not acquisition indebtedness. However, the IRS states that up to $100,000 of such debt can be treated as home equity indebtedness (assuming no separate home equity debt exists), thereby allowing interest on $1,100,000 of the debt to acquire the home to be deductible.