The Internal Revenue Service has proposed regulations that would require paid tax return preparers to file a due-diligence checklist with any federal return claiming the Earned Income Tax Credit. The IRS wants preparers to file Form 8867, the same form preparers are required to retain in their records, starting next year.
The due-diligence requirement was enacted by Congress more a decade ago to reduce errors on returns claiming the EITC. For 2009, more than 26 million people received nearly $59 billion through the EITC. Tax professionals prepared nearly 66 percent of these claims.
Form 8867, the Paid Preparer's Earned Income Credit Checklist, was designed to help preparers meet the requirement by obtaining eligibility information from clients.
Starting January 1, the proposed regulations would require preparers to file the form with each return claiming the EITC. Further details can be found in REG-140280-09. Comments on the proposed regulations are due by Nov. 10, 2011, and a public hearing is scheduled for November 7.
