What is Form 8867?

If you are paid to prepare an EITC claim, due diligence regulations require you to complete and submit the Form 8867, Paid Preparer's Earned Income Credit Checklist, with all electronic and paper EITC returns or claims for refund. Using the Form 8867 ensures you consider all EITC eligibility criteria for each claim you prepare.

The penalty for filing any EITC claim missing the Form 8867 is $500 per return under Internal Revenue Code section 6695(g).

EITC Due Diligence Requirements and Form 8867

To meet your due diligence, you must:

  • Complete the form with information you get from your client. And, document, at the time of the interview, any additional questions you asked and your client’s replies

.

  • Complete all required parts.You must complete Parts I, IV and V for every client. And, either Part II or Part III.

 

  • Submit the completed Form 8867 with each EITC electronic return you send or attach the completed Form 8867 to any EITC return or claim for refund you prepare and present to your client to send.

 

  • If you are not the signing tax return preparer, give the completed Form 8867 to the signing preparer either electronically or on paper.

 

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
  • Part V covers documents provided to you by your client

 

Tips on completing Form 8867

You need to answer the questions covering EITC eligibility on the Form 8867 using information from your client. But, we don't recommend you ask your clients the questions listed on the form. Use words and terms your client knows and won't misunderstand. 

For example,

  • Don't ask: What's your marital status? Ask: Are you single or married?
  • Don't ask: Are you head of household? Find out if they qualify by asking all the right questions.
  • Don't ask if they have a qualifying child or a dependent, find out who they lived with during the tax year and for how long.

 

If you give your client an EITC return or electronic version to sign and send in, you must attach the completed Form 8867 to it. Be sure to stress the importance of sending in all the forms to the IRS. Also, keep a record of the forms and schedule you gave to your client.

What Happens if IRS Receives an EITC Claim Missing the Form 8867?

If the Form 8867 is not included with EITC returns you prepared, you may get a warning letter or an alert with your acknowledgements during the filing season. 

  • Letter 5364 is sent to those who prepare paper EITC returns without a Form 8867.

 

  • Acknowledgement Alerts are sent electronically to those preparers who e-file EITC returns without Form 8867.

 

We can't associate a Form 8867 with return that is already processed. So please don't submit the form separately. Doing so has no affect on your penalty assessment.

If we continue to receive EITC claims prepared by you missing the Form 8867, we continue to send warning letters. We also may send the Letter 1125 with the Form 5816, Report of Tax Return Preparer Penalty Case, assessing the EITC Due Diligence penalty of $500 for each missing form.  

What Should I Do if I Receive a Warning?

Don't ignore the letter. Change your procedures to ensure the Form 8867 is completed and submitted with every EITC claim. Make sure your return preparation software includes the Form 8867. Off the shelf software, intended for individual filing, doesn't include the form.

For returns submitted electronically, make sure the setting for including the Form 8867 is not disabled. For paper returns, make sure you let your clients know the importance of submitting all the forms you include. And, keep a record of the forms you included in the package you give your clients. 

We can't associate a Form 8867 with return that is already processed. So please don't submit the form separately. Doing so has no affect on your penalty assessment.

If you did not prepare any client return(s) and are no longer a paid preparer, please see What Can I Do to Protect my EFIN and PTIN?

What if I Don't Agree with the Penalties?

See Appeal of EITC Due Diligence Penalties

Additional Due Diligence Resources

 

Return to Main Due Diligence Page

 

 

Page Last Reviewed or Updated: 03-Oct-2014