Hot Topics for Return Preparers

Scroll down for news on these hot topics:

  • Final Due Diligence Regulations Published
  • Free IRS Tax Reform Due Diligence Webinar
  • Nationwide Tax Forum Due Diligence Training available online
  • Updated Due Diligence Training Module
  • IRS Sending Refundable Credit Due Diligence Letters to Paid Tax Return Preparers  Who May be Noncompliant in Meeting their Due Diligence Requirements
  • When Can Your Client's Expect Their Refunds?
  • Revised Rules Allow More Taxpayers to Claim the EITC without a Qualifying Child
  • Paid Preparer Due Diligence Penalties
  • IRS EITC Compliance Strategy Brings Injunctions
  • Educational Opportunities
  • Education Credit News
  • Protect Your EFIN and PTIN
  • Make a Complaint About a Tax Return Preparer
  • Don't Miss Any Refundable Credit News

Final Due Diligence Regulation Published

Final Treasury Regulation  § 1.6695-2, Tax Return preparer due diligence for certain tax returns and claims, was published November 7, 2018. Learn more about the extended rules.

 

Free IRS Tax Reform Due Diligence Webinar

Tax Reform Due Diligence Requirements Webinar to be held Thursday, December 13, 2018 at 2:00 PM EST.

Click here to Register

The webinar is 60 minutes including Q&A. And, Closed Captioning is available for the session.

Continuing Education:

  • All participants who qualify will receive a Certificate of Completion
  • Tax Professionals will earn 1 CE Credit –  Category: Federal Tax Update
  • Have enough Federal Tax Update credit? No worries…excess Federal Tax Update credit can be counted towards Federal Tax/Tax Related Matters instead.

For information on future Tax Reform Webinars visit the Upcoming Webinars page on IRS.gov.

Questions about the webinars?  Email us at:  cl.sl.web.conference.team@irs.gov

Nationwide Tax Forum Training Now Available

The IRS Nationwide Tax Forums Online (NFTO) provides information for tax professional from the speakers at the IRS Nationwide Tax Forums. Each online, self-study seminar includes interactive video synchronized with a PowerPoint presentation, along with downloadable slides and transcript.

NFTO seminars may be taken for either continuing professional education (CPE) credit or audit. NFTO is registered with the Internal Revenue Service and the National Association of State Boards of Accountancy (NASBA) as an approved sponsor of continuing professional education for CPA's and EA's. Click here to take advantage of this training.

Updated Due Diligence Training Module

Several changes to tax preparer refundable credits due diligence requirements will be required due to the Tax Cuts and Jobs Act. New training will be available beginning in early 2019. Check back for updates and further information.


We previously updated the training module with additional information on the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) and the 2017 Form 1098. In 2019, updates will be include information on new due diligence requirements under the Tax Cuts and Jobs Act of 2017.

If you haven't already received CE credit this year, we encourage you to take the module and you may qualify for one continuing education credit.  If you already took the module this year, we encourage you to review the updates, but you can't receive another credit.
 

IRS Sending Refundable Credit Due Diligence Letters to Paid Tax Return Preparers Who May be Noncompliant in Meeting their Due Diligence Requirements

These letters are sent to raise awareness of questionable returns IRS received and assist paid preparers in meeting their due diligence requirements. IRS will continue to monitor returns prepared in the upcoming filing season to see if the accuracy of the preparers’ returns improves. You can view the letters, in both English and Spanish, here.

When Can Your Client's Expect Their Refunds?

If you your clients claim the Earned Income Tax credit (EITC) or the Additional Child Tax credit (ACTC) on their tax returns, by law the IRS, can’t issue the refund before mid-February. Find out more on refund timing.

Revised Rules Allow More Taxpayers to Claim the EITC without a Qualifying Child

The IRS changed its position on who may claim the earned income tax credit (EITC) without a qualifying child in situations in which dependent meets the definition of a qualifying child for more than one taxpayer. Under the new rules, a taxpayer who may not claim an individual as a qualifying child after applying the tie-breaker rules may now claim the EITC without a qualifying child, if all other requirements are met.

The new rule is explained in proposed regulations issued on January 19, 2017. This change affects all open tax years.  Thus, for example,  you may apply this rule on a 2016 return or an amended return for an earlier year that is open under the statute of limitations.  

This new rule may apply in households in which an individual meets the definition of a qualifying child for more than one taxpayer.  For example, this new rule may apply in households in which grandparents, children, and grandchildren live together  or in households with unmarried parents who both work.  For more information and examples, see Applying Tiebreaker Rules to the Earned Income Tax Credit.

We will have further updates on these proposed regulations soon. We are working with software providers, tax return preparers, and other partners to get the word out and to update software and forms and instructions.

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Paid Preparer Due Diligence Penalties

  • The $500 penalty for each failure to meet your due diligence requirements for EITC, CTC/ACTC/ODC, AOTC or head of household filing status is adjusted for inflation. The penalty for returns filed after 2018 is $520 per failure.
  • Paid preparers must exercise due diligence by keeping records, conducting interviews and asking adequate questions to determine whether a taxpayer meets all the eligibility requirements for these credits and head of household filing status. Failure to take these steps can be costly.
  • The penalty applies to each credit and claim for head of household filing status incorrectly submitted on a tax return. For example, if a preparer fails to meet due diligence requirements for ALL THREE credits and head of household filing status, the preparer’s penalty would be $2,080 for a return filed after 2018.

Educational Opportunities

Find opportunities to learn more about refundable credit eligibility rules, tax law and regulations updates, return preparer’s due diligence requirements and more. Many of the opportunities offer continuing education credits.

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IRS EITC Compliance Strategy Brings Injunctions

The Department of Justice can ask federal courts to permanently bar certain preparers form preparing federal tax returns for others if EITC due diligence requirements are not met. Recent injunctions permanently barred preparers whose incorrect returns resulted in millions of dollars in losses to the government. Find more information on the process and the preparers involved here.

 

Protect Your EFIN and PTIN

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?

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Make a Complaint Against a Tax Return Preparer

Use this site to find out how to file a complaint about a tax preparer.

Don't Miss Any News

Visit What's Hot on EITC and Refundable Credit Central for more news related to refundable credits.

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