The PATH Act expanded due diligence requirements to Section 24 Child Tax Credit (CTC), including the additional CTC, and the Section 25A(i) American Opportunity Tax Credit (AOTC). Because of these requirements, preparers take specific steps to determine the taxpayer’s eligibility for, or the amount of, the EIC, CTC and AOTC.

The reports provides a due diligence checklist to follow the requirements Failure to take these steps can result in a penalty of $510 for taxable years beginning in 2016 and 2017.

“Establishing appropriate procedures to ensure compliance with the due diligence requirements and then routinely following those procedures is paramount to avoiding the due diligence penalty,” said Blake Smith, senior director, product development, Checkpoint with the Thomson Reuters Tax & Accounting business. “

The report provides a due diligence checklist.