02/19/2020
Include Form 8867, Paid Preparer’s Due Diligence Checklist, with returns
The IRS is sending letters to tax preparers who completed six or more 2019 paper returns claiming refundable tax credits without attaching Form 8867, Paid Preparer’s Due Diligence Checklist. As the filing season continues, tax preparers should remember that due diligence requirements include the:
• Head of Household filing status,
• Earned Income Tax Credit,
• Child Tax Credit/Additional Child Tax Credit,
• American Opportunity Tax Credit, and
• Credit for Other Dependents
One of four due diligence requirements is to properly complete and submit Form 8867 to certify paid tax preparers confirmed their clients’ eligibility for each of the credits. Failure to complete and submit Form 8867 may result in a penalty of $530 per failure, with a maximum penalty of $2,120 per return.
Form 8867 and instructions includes information about these refundable credits. For more information on due diligence requirements, go to the Tax Preparer Toolkit on EITC Central.
