Form 8867 – Paid Preparer’s Due Diligence Checklist

• interview the client,
• ask adequate questions,
• obtain appropriate and sufficient information to determine the correct reporting of income, claiming of tax benefits (such as deductions and credits), and compliance with the tax laws.

  Is Form 8867 required to be filed?

  If you were paid to prepare a return for any taxpayer claiming the EIC, the CTC/ACTC/ODC, the AOTC, and/or HOH filing status, you must complete Form 8867 and meet the other due diligence requirements described later in Purpose of Form. Form 8867 must be filed with the return.

  What purpose is Form 8867 used?

  The purpose of Form 8867 is to ensure that the tax preparer has considered all applicable EIC eligibility requirements for each prepared tax return.

  How long does a due diligence take?

  How long does it take? Typically, the due diligence period lasts for 45-180 days, depending on the sophistication of the buyer and complexity of the deal. With more complicated deals, it could last six to nine months.

  What are the EITC due diligence requirements?

  Basically, due diligence requires you, as a paid preparer, to: Evaluate the information received from the client. Apply a consistency and reasonableness standard to the information. Make additional reasonable inquiries when the information appears to be incorrect, inconsistent, or incomplete.

  Do you have to do due diligence on form 8867?

  Form 8867 – Paid Preparer’s Due Diligence Checklist. Paid tax return preparers are required to exercise due diligence when preparing any client’s return or claim for refund.

  Do you need to fill out form 8867 for CTC?

  If you are paid to prepare a tax return claming an earned income tax credit (EITC), a child tax credit (CTC), an additional child tax credit (ACTC), or an American opportunity tax credit AOTC), due diligence regulations now require you to complete and submit the Form 8867, Paid Preparer’s Due Diligence Checklist.

  What is the paid preparer’s Due Diligence Checklist?

  Paid Preparer’s Due Diligence Checklist Earned Income Credit (EIC), American Opportunity Tax Credit (AOTC), Child Tax Credit (CTC) (including the Additional Child Tax Credit (ACTC) and Credit for Other Dependents (ODC)), and Head of Household (HOH) Filing Status ▶ Attachment

  What are the tax credits on form 8867?

  Form 8867 Department of the Treasury Internal Revenue Service Paid Preparer’s Due Diligence Checklist Earned Income Credit (EIC), American Opportunity Tax Credit (AOTC), Child Tax Credit (CTC) (including the Additional Child Tax Credit (ACTC) and Credit for Other Dependents (ODC)), and Head of Household (HOH) Filing Status ▶ Attachment