When a taxpayer receives more EIC after adding a Schedule C to their return than they would have received without it, the tax preparer must: Document in EIC Notes the amount of EIC with and without Schedule C and advise the taxpayer that they are a likely candidate for an audit. Omit Schedule C from the return and include the income on Schedule 1, line 8, as nonemployee compensation not subject to self-employment tax. Apply sound judgment and common sense to the information provided and provide question-and-answer documentation to show the questions asked and the taxpayer's responses. Not include expenses on the Schedule C by making an adjustment to the income reported on the Schedule C