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Paid tax return preparers are required to exercise due diligence when preparing any client’s return or claim for refund. Starting in 2016, the paid tax return preparer's Earned Income Credit (EIC) due diligence and recordkeeping requirements have been expanded to also cover the Child Tax Credit/Additional Child Tax Credit (CTC/ACTC) and the American Opportunity Tax Credit (AOTC). As a result, Form 8867 has been modified to account for these additional requirements and the form has been renamed the Paid Preparer’s Due Diligence Checklist and this revised Form 8867 must be filed with the tax return for any taxpayer
claiming EIC, the CTC/ACTC, and/or the AOTC. Be prepared to address the new requirements this coming tax season for compliance with the Form 8867 due diligence requirements and avoid a $510.00 penalty for each return.
Key Learning Objectives- Meeting the Know Your Customer (KYC) knowledge requirement by interviewing the taxpayer, and asking adequate questions
- Contemporaneously documenting the questions and the taxpayer's responses in your notes
- Reviewing adequate information to determine if the taxpayer is eligible to claim the credit(s) and in what amount(s)
- Understanding the necessity of keeping all five of the following records for three years from the latest of the dates specified later, in Document Retention
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 | Stanley I. Foodman
CEO, Foodman CPAs and Advisors | |
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