New Due Diligence Requirements for Earned Income Credit

Post Date: 11/9/11
Last Updated: 11/9/11


Cross References
• IR-2011-98, October 6, 2011
• REG-140280-09
• Public Law 112-41

In an effort to assist tax preparers with the earned income tax credit (EITC) due diligence requirements, the IRS issued proposed regulations requiring tax preparers to file Form 8867, Paid Preparer’s Earned Income Credit Checklist, with each submitted return claiming the EITC.

Form 8867. Effective for returns filed after December 31, 2011, Form 8867 must be filed with each tax return claiming the EITC. Form 8867 is a checklist that helps preparers meet the due diligence requirements by obtaining eligibility information from their clients. Previously, tax return preparers were required to only maintain copies of the form or equivalent documents, which are subject to review by the IRS. Tax return preparers continue to complete the earned income credit (EIC) worksheet in the Form 1040 instructions and maintain a record of how and when the information used to complete Form 8867 and the EIC worksheet was obtained.
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