📝 Due Diligence on Form 8867 – Protect Yourself from Penalties

Alexis Clarke · 2026-09-26T15:32:00.534Z

Attention EROs & Service Bureaus!! If you prepare returns claiming EITC, CTC/ACTC, AOTC, or HOH filing status, you must complete Form 8867 (Paid Preparer’s Due Diligence Checklist). This isn’t optional — it’s the IRS law. 🔎 What Form 8867 Requires Ask the right questions – You must make reasonable inquiries if the information provided seems incorrect, inconsistent, or incomplete. Keep proper documentation – Maintain copies of worksheets, proof of income, and notes from your client interview. File the checklist with every return – It must be submitted alongside the return if those credits/statuses are claimed. ⚠️ Penalties for Failure The penalty is $600 per failure, per credit. Example: If you miss due diligence on EITC, CTC, and HOH for the same return, that’s $1,800 in penalties. Penalties apply even if the client legitimately qualified — if you didn’t document it properly, you’re liable. 💡 How to Protect Yourself Always complete Form 8867 (no shortcuts).

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📝 Due Diligence on Form 8867 – Protect Yourself from Penalties

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📝 Due Diligence on Form 8867 – Protect Yourself from Penalties