Some tax preparers told us they are uncomfortable asking the probing, sometimes sensitive questions necessary to meet the due diligence knowledge requirement.
Consider using the forms IRS uses to request documentation during audits. Tell your clients here's what you need to support your claim if you are audited by IRS. Do you have these documents or can you get them? You don't have to review the documents, but if you do and you rely on the information to prepare a claim for the earned income tax credit (EITC), child tax credit or additional child tax credit (CTC/ACTC), credit for other dependents (ODC) or American opportunity tax credit (AOTC), be sure to keep a copy either on paper or electronically. Most of the forms are available in both English and Spanish.
For example, you could use the Form 886-H-EIC and/or the 886-H-EIC (Spanish Version), Documents You Need to Prove You Can Claim an Earned Income Credit on the Basis of a Qualifying Child or Children. Review the document with your client, showing the client the legal requirements a qualifying child must meet. Then, confirm with your client if they have or can get the supporting documents. Also, advise your clients to keep these important supporting documents for the three years after the due date of the return in case the IRS audits the tax return.
Other Forms 886 and 14815, you may find useful in preparing your client's returns:
- Form 886-H-HOH, 886-H-HOH (Spanish Version). Supporting Documents To Prove Head of Household Filing Status
- Form 886-H-DEP, 886-H-DEP (Spanish Version), Supporting Documents for Dependency Exemptions
- Form 886-H-AOC, Form 886-H-AOC(Spanish Version), Supporting Documents to Prove American Opportunity Credit
- Form 886-H-AOTC-MAX American Opportunity Tax Credit Available for a Maximum of 4 Years
- Form 14815, Supporting Documents to Prove the Child Tax Credit (CTC) and Credit for Other Dependents (ODC) for 2018 - 2025
- Form 886-H-ITIN, Form 886-H-ITIN(Spanish Version), Dependent-Related Tax Benefits and Credits—Explanation of Items (for tax years before 2018)
More Tools and Tips
- Review our tips on preventing the most common processing errors.
- See examples about Handling Most Common Due Diligence Situations.
- Avoid the three most common EITC errors. See our Handling the Most Common Errors
- What is Form 8867?
- Due Diligence on the go! Publication 4687, Refundable Credits Due Diligence, is a guide to help you comply with your refundable credits due diligence requirements. Also, available in Spanish, Publication 4687 SP.
- Your clients can find out if they are eligible for the EITC, Earned Income Tax Credit by answering some questions and providing basic income information using the EITC Assistant on irs.gov.