IRS is sending Letters 5364 and 4858 to EITC tax return preparers starting January 2015 and continuing through the 2015 filing season. We send the Letter 4858 to tax return preparers based on questionable EITC claims they completed and Letter 5364 for EITC returns filed missing the Form 8867. The letters are educational only. For Letter 4858, IRS will continue to monitor the EITC returns prepared in the upcoming filing season to see if the quality of the preparers’ returns improves. If the accuracy of the EITC returns does not improve, we may use special follow-up procedures including the possibility of an on-site audit. For letter 5364, follow-up procedures will include penalties if the preparer continues to submit EITC returns missing Form 8867. For more information and examples of the letters in English or Spanish, see our pages, Reaching Out to Preparers and What is Form 8867?
IRS is calling some tax preparers during this filing season. We call preparers who received Letters 4833 or 5025 in the fall of 2014. Preparers receiving the calls are continuing to file EITC returns that appear questionable. The calls are one of the follow-up actions discussed in the letters.
The callers identify themselves as IRS employees and provide their employee ID numbers. The callers do ask the preparers to verify their identity to avoid improper disclosure. If you have concerns, we suggest you offer only the last 4 digits of your SSN or PTIN. See Reaching Out to Preparers for more information and for English and Spanish versions of the letters.
Verify you entered the correct PTIN(s), Preparer Tax Identification Number,(s) into your tax software for yourself and your employees. Also, be sure to remove PTINs for non-returning employees. Using an incorrect PTIN could lead to penalties and unnecessary contact with IRS. Also find out more about how you can protect your EFIN and PTIN here.
The IRS recently got another EITC Due Diligence injunction that prohibits preparers from preparing any further federal income tax returns. These 21 EITC compliance strategy injunctions represent over $119 million dollars in harm to the government. Find more information on the process and the preparers involved here.
The IRS webinars that aired January 7, and 8, 2015 are now available for your viewing. Learn how to avoid common errors and penalties when determining eligibility for IRS Refundable Tax Credits such as the American Opportunity Tax Credit, Child Tax Credit and Earned Income Tax Credit. You’ll also hear how due diligence can benefit you, your clients and your business. IRS subject matter experts offer tips and resources to help you prepare and file accurate claims for refundable tax credits. View the Keeping Up with Earned Income and Refundable Tax Credits video here. View the El Crédito por Ingreso del Trabajo y Créditos Reembolsables video which aired 8 de enero de 2015 here.
Educators (colleges, universities, trade and technical schools), those who prepare the Form 1098-T and tax returns preparers if you missed the IRS Webinar, Not Just College Credits; it's Tax Credits Too or would like to review it, we will post a link to the seminar in about 3 weeks. If you have comments or questions about the webinar, please contact us. Find out What You Need to Know about AOTC and LLC here.
The two seminars the EITC and Refundable Credit office presented at the 2014 Nationwide Tax Forums are now available online. You can audit the seminars for no fee or pay a fee to take the courses for Continuing Education credit. Find out more on our tax forum page.
Keep yourself and your practice safe from fraud. We have found unauthorized uses of PTINs, Preparer Tax Identification Numbers, and EFINs, Electronic Filing Identification Numbers. Find out more on our page, What Can I Do to Protect my EFIN and PTIN?