Publication 4687 specifies that under the due-diligence requirement, a preparer must ask the taxpayer additional questions “if a reasonable and well-informed tax return preparer, knowledgeable in the law, would conclude the information furnished seems incorrect, inconsistent or incomplete.” The publication also says …

When preparing returns claiming the EITC the tax return preparer must complete?

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.

How long must a tax preparer maintain records of due diligence requirements when completing Form 8867 paid preparer’s due diligence checklist?

Keep all required records for three (3) years from when the return was due (not including extensions) or was actually filed, whichever is later. (See: Instructions for Form 8867 – Document Retention Requirements for Paid Preparers).

What are the 4 due diligence requirements for tax return preparers and EIC?

The Four Due Diligence Requirements

• Complete and Submit Form 8867. (Treas. Reg. section 1.6695-2(b)(1))
• Compute the Credits. (Treas. Reg. section 1.6695-2(b)(2))
• Knowledge. (Treas. Reg. section 1.6695-2(b)(3))
• Keep Records for Three Years.

Do you have to meet due diligence requirements for CTC?

Preparer Due Diligence Preparers who are paid to complete returns claiming the earned income tax credit (EITC), child tax credit (CTC), additional child tax credit (ACTC), credit for other dependents (ODC), American opportunity tax credit (AOTC) or head of household (HOH) filing status must meet due diligence requirements.

What do you need to know about EITC due diligence?

EITC due diligence, IRC §6695(g), requires paid tax return preparers to make additional inquiries of taxpayers who appear to be making inconsistent, incorrect or incomplete claims related to their self-employment when the tax return includes the earned income tax credit.

How to do the paid Due Diligence Checklist?

Paid Preparer’s Due Diligence Checklist Earned Income Credit (EIC), Child Tax Credit (CTC), and American Opportunity Tax Credit (AOTC) ▶To be completed by preparer and filed with Form 1040, 1040A, 1040EZ, 1040NR, 1040SS, or 1040PR. ▶ Sequence No. Information about Form 8867 and its separate instructions is at

Do you have to do due diligence when preparing a tax return?

Preparer Due Diligence. Preparers who are paid to complete returns claiming the earned income tax credit (EITC), the Child Tax Credit and the refundable portion, the additional child tax credit (CTC/ACTC) and the American opportunity tax credit (AOTC) must meet due diligence requirements.