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 are imposed for the:
- Head of household filing status
- Earned income tax credit
- Child tax credit/additional tax credit/other dependent credit
- American opportunity tax credit
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 high penalties for each failure.
Disregarding the requirements could result in penalties and other consequences for the preparer and their clients. The penalty is $530 per failure for tax returns filed in 2020.
The IRS takes tax preparer due diligence seriously, and so do we. By joining NATP, tax preparers will receive the tools necessary to comply with these requirements. NATP members have access to:
- A white paper that includes a description of preparer requirements
- A case study that shows how to apply the requirements
- An intake questionnaire
Become a member now to receive access and we’ll waive the $25 application fee to join!
About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.