Additional questions you asked and your client’s
replies. I cannot iterate enough, complete all required parts! You must
complete Parts I, IV and V for every client, and, either Part II or Part III
as required. Always, 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. Remind your client that Form 8867 must
be send in order for their Earned Income Credit be processed correctly. If
too many of your clients leave Form 8867 out, the IRS for sure will come
knocking on your door.
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. The
manner in which you ask the interview questions will determine the accuracy
of the responses. Also, you want to avoid any possibility of fraud, so gear
your questions in such a way as to be clear of fraud.
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. Form 8867 is extremely important.
Follow and make sure the questions are answered on it correctly. If you
suspect any wrongdoing or anything wrong with the responses, ask more
questions. Ultimately, you are given the responsibility of the accuracy of
information that goes on this form. There are high penalties at stake for
you and you must do everything is your power to avoid these due diligence
penalties.
If the Form 8867 is not included with EITC
returns you prepared, you may get a warning letter from the IRS
during the filing season. You may also start getting alerts with your
acknowledgements that Form 8867 is not being included. You can use all the
help you can get, and the IRS is there to help you after all. Furthermore, if Form 8867 is not included with EITC
returns you prepared, you may get letter 5364 which is sent to
those who prepare paper EITC
returns without a Form 8867. Receiving acknowledgement
Alerts which are sent electronically to those preparers who e-file EITC returns without Form 8867,
is a good thing. You may inadvertently be excluding this extremely important
document from your filings and these notifications could be a blessing.
If you have been leaving this
form out of your filings, you don't want to submit Form 8867 separately without a
tax return because the IRS cannot associate a Form 8867 with a
tax return that has already been processed. Therefore, doing so will have no
effect on the tax preparer's penalty assessments. You should never send Form
8867 separately. If the IRS continues to receive EITC claims
prepared by you missing the Form 8867, they will continue to
send warning letters. The IRS can only take so much abuse and may start
sending Letter 1125 with the Form 5816, assessing the EITC Due Diligence penalty of $500 for each missing
form.
You should start changing your
procedures to ensure the Form 8867 is completed and submitted with every EITC claim
to avoid the warnings for not submitting Form
8867 with returns. The last thing you
