IRS Issues Proposed Regulations That Would Require Tax Preparers to File Due Diligence Checklist with All EITC Claims Submitted in 2012

IR-2011-98, Oct. 6, 2011

WASHINGTON —The Internal Revenue Service announced today that it is issuing proposed regulations that would require paid tax return preparers, beginning in 2012, to file a due diligence checklist, Form 8867, with any federal return claiming the Earned Income Tax Credit (EITC). It is the same form that is currently required to be completed and retained in a preparer’s records.

The due diligence requirement, enacted by Congress over a decade ago, was designed to reduce errors on returns claiming the EITC, most of which are prepared by tax professionals. » Read more..

EITC Preparer Compliance – Targeted, Tailored and Tiered

According to the latest IRS release, because of the multiple system abuse by taxpayers and tax preparers not doing their due diligence when it comes to EITC the following steps will be necessary to stop system wide abuse.

This is what they will do for 2012 tax season: 

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 Why Have a Preparer Compliance Program?

We estimate 24 to 29 percent of all EITC claims have some type of mistake which costs the government $13 billion to $16 billion each year. » Read more..