What is Form 8867?

ALERT: IRS to Penalize Preparers for Failure to Attach Form 8867


For tax year 2012, IRS is sending notice of penalty letters to nearly 800 preparers who received the warning Letter 4989 and continued to submit EITC claims without the Form 8867.

Starting with the 2013 tax year, IRS will penalize all preparers who do not submit or attach the Form 8867,* Paid Preparer's Earned Income Credit Checklist, with both electronic and paper EITC returns or claims for refund.

IRS will penalize these preparers $500 for each failure to submit or attach the form.


ALERTA: El IRS Cobrará Penalidades a Preparadores por Negligencia en Adjuntar el Formulario 8867


Para el año tributario 2012, el IRS enviará cartas de aviso de penalidades a casi 800 preparadores que recibieron la carta de aviso (carta 4989, en inglés) y continuaron presentando reclamaciones de EITC sin el Formulario 8867.


A partir del año tributario 2013, el IRS cobrará una penalidad a todos los preparadores que no presenten o adjunten el Formulario 8867 (en inglés),* Lista de Cotejo de Elegibilidad del Crédito Tributario por Ingreso del Trabajo, tanto en declaraciones electrónicas como aquellas en papel que incluyan o reclamen un reembolso del EITC.


El IRS cobrará a estos preparadores una penalidad de $500 por cada omisión en presentar o adjuntar el formulario.

If you are paid to prepare a return claiming EITC, due diligence regulations require you to complete and submit Form 8867*, Paid Preparer's Earned Income Credit Checklist. Using the Form 8867 ensures you consider all EITC eligibility criteria for each return you prepare. Under the regulations finalized December 2011, you are now required to:

  • Submit the Form 8867 with every electronic return with an EITC claim you file.
  • If you prepare a paper EITC return or claim for refund, attach the completed Form 8867 to the copy of the return or claim for refund provided to your client.
  • Attach the completed Form 8867 to any EITC return or claim for refund that you prepare and present to your client for filing.
  • If you are not the signing tax return preparer, give the completed Form 8867 to the signing paid preparer either electronically or on paper.

 

Completing the Form 8867

You need to complete all four parts of the Form 8867:

  • Part I covers EITC eligibility requirements for all taxpayers
  • Part II covers EITC eligibility requirements for taxpayers with a child
  • Part III covers EITC eligibility requirements for taxpayers without a qualifying child
  • Part IV covers the preparer's due diligence requirements


Tips on completing Form 8867

You need to answer the questions covering EITC eligibility on the Form 8867 using information from your client. We recommend you ask each question in language your client understands and ask probing questions of your client instead of questions with a yes or no answer. For example, the question, "Is the taxpayer's filing status married filing separately?" Don't let your client tell you his or her filing status. You need to determine your client's filing status and ask the questions that get you to the correct answer. See some of the suggested questions you might ask of a married taxpayer who isn't planning to file a joint return to find out if he or she qualifies for single or head of household in our tips for "Handling the Most Common Errors" page.


Failure to Complete and Submit the Form 8867

Completing and submitting the Form 8867 for each tax return claiming EITC is a due diligence requirement. Starting with Tax Year 2011, you must submit the completed Form 8867 with each EITC return you file electronically or by mail. If you give your client a paper return or electronic version to sign and submit, you must attach the completed Form 8867 to it.

If you fail to do so, you do not meet your due diligence requirements and are subject to a $500 penalty under Internal Revenue Code section 6695(g) for each EITC return or claim for refund. You are also subject to the $500 penalty for not completing the form. There is no maximum to the number of penalties IRS can impose. For example, you submit 50 returns with EITC claims and no Forms 8867, your penalty could be $25,000.

See Consequences of Filing EITC Returns Incorrectly for additional actions IRS can take for failing to meet your due diligence requirements.

What if I Don't Agree with the Penalties?

See, Appeal of EITC Due Diligence Penalties

*This link brings you to the most current version of the Form 8867 available.
 

Additional Due Diligence Topics

 

Return to Main Due Diligence Page

 

 

Page Last Reviewed or Updated: 07-Mar-2014