2016-2025 Form

What is the IRS Form 8867

The IRS Form 8867, known as the Paid Preparer's Due Diligence Checklist, is a crucial document used by tax preparers to ensure they meet the due diligence requirements when preparing tax returns that claim certain tax benefits. This form is particularly relevant for tax credits such as the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), and American Opportunity Credit (AOC). By completing this form, tax preparers affirm that they have taken the necessary steps to verify the eligibility of their clients for these credits, thereby reducing the risk of errors and potential penalties.

How to use the IRS Form 8867

To use the IRS Form 8867 effectively, tax preparers should follow a systematic approach. First, they need to gather all relevant information from their clients, including income details, dependent information, and any other documentation that supports the claim for tax credits. Next, the preparer should complete the form by answering all questions accurately, ensuring that they have conducted the required due diligence. It is essential to retain copies of the form and any supporting documents for their records, as these may be requested by the IRS in case of an audit.

Steps to complete the IRS Form 8867

Completing the IRS Form 8867 involves several key steps:

• Gather all necessary client information, including income, dependents, and relevant tax documents.
• Review the eligibility criteria for the tax credits being claimed.
• Fill out the form by answering all questions, ensuring accuracy in each section.
• Sign and date the form, confirming that due diligence has been performed.
• Keep a copy of the completed form and all supporting documentation for your records.

Legal use of the IRS Form 8867

The legal use of the IRS Form 8867 is essential for tax preparers to comply with IRS regulations. By submitting this form, preparers confirm that they have exercised due diligence in verifying their clients' eligibility for tax credits. Failure to complete this form correctly can lead to penalties, including fines and disqualification from preparing tax returns. It is vital for preparers to stay informed about the latest IRS guidelines regarding the use of this form to ensure compliance and protect their clients' interests.

Filing Deadlines / Important Dates

Tax preparers should be aware of the filing deadlines associated with the IRS Form 8867. Typically, this form must be submitted along with the client's tax return by the tax filing deadline, which is usually April fifteenth for most taxpayers. However, if the taxpayer is granted an extension, the form must be filed by the extended deadline. It is important to keep track of these dates to avoid late penalties and ensure timely processing of tax returns.

Penalties for Non-Compliance

Non-compliance with the requirements associated with the IRS Form 8867 can result in significant penalties for tax preparers. If a preparer fails to complete the form or does not exercise due diligence in verifying eligibility for tax credits, they may face penalties ranging from $500 to $1,000 per violation. Additionally, repeated failures can lead to the loss of the ability to prepare tax returns. Therefore, it is crucial for preparers to understand the importance of this form and adhere to IRS regulations.