The Tax Preparer is following the IRS Qualifying Child Rules which state the rules the child must meet to claim Earn Income Tax Credit. Besides having a valid Social Security and not being claimed by more than one person there are 4 tests to qualify a child for EITC. The one you are referring to is under the Relationship test that I including here to clarify why the Tax Preparer told you that you cannot claim the child as a qualifying child because she is not related to you. The real reason is that the child does not meet the relationship test which states:
To be a qualifying child for the EITC, your child must be your:
- Son, daughter, stepchild, adopted child, or foster child
- Brother, sister, half-brother, half-sister, stepsister or stepbrother
- Grandchild, niece or nephew
Adopted child definition
An adopted child is a child who is lawfully placed with you for legal adoption.
Foster child definition
For the EITC, you can only claim a foster child that is placed with you by:
- A State or local government agency
- An Indian tribal government
- A tax-exempt organization licensed by a state or an Indian tribal government
- A court order
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