Screen 8867 - Due Diligence Checklist (EIC, CTC/ACTC, AOTC)

Overview

Use this screen to enter information to complete Form 8867, Paid Preparer’s Due Diligence Checklist.

Due Diligence Requirements

Use this section to provide information for and comply with due diligence requirements. The questions provided pertain to all applicable credits claimed on the return, including earned income credit (EIC), child tax credit/additional child tax credit (CTC/ACTC), and American opportunity tax credit (AOTC).
UltraTax CS requires this information for the completion of Form 8867, line 1.
  • Enter
    1
    if information provided by the taxpayer and/or reasonably obtained by the preparer was obtained to complete the return.
  • Enter
    2
    if the taxpayer and/or preparer didn't provide and/or obtain this information.
UltraTax CS requires this information for the completion of Form 8867, line 3a.
  • Enter
    1
    if questions and answers were properly asked and documented to determine the taxpayer’s eligibility for claiming the credits.
  • Enter
    2
    if questions and answers weren't asked and documented.
UltraTax CS requires this information for the completion of Form 8867, line 3b.
  • Enter
    1
    if adequate information was reviewed in an effort to determine the taxpayer’s eligibility for and amount of the credits.
  • Enter
    2
    if adequate information wasn't reviewed.
UltraTax CS requires this information for the completion of Form 8867, line 4.
  • Enter
    1
    if any information provided by the taxpayer, third party, or obtained by the preparer in connection with preparing the return appeared to be incorrect, incomplete, or inconsistent.
  • Enter
    2
    if all information appeared to be correct.
UltraTax CS requires this information for the completion of Form 8867, line 4a.
  • Enter
    1
    if reasonable inquiries were made in order to determine information provided by the taxpayer or 3rd party was both correct and complete.
  • Enter
    2
    if reasonable inquiries weren't made to validate the information provided.
UltraTax CS requires this information for the completion of Form 8867, line 4b.
  • Enter
    1
    if all inquires made of the taxpayer or third party were contemporaneously documented.
  • Enter
    2
    if the inquires weren't appropriately documented.
UltraTax CS requires this information for the completion of Form 8867, line 5.
  • Enter
    1
    if copies of all documents provided by the taxpayer, and subsequently used to determine the credit eligibility and amount, were retained by the preparer.
  • Enter
    2
    if the preparer didn't keep copies of these documents.
UltraTax CS requires this information for the completion of Form 8867, line 5.
Use the attached statement to enter a description of all documents used to determine the eligibility for and amount of the credit. A custom fieldview is available in the attached statement.
The IRS may request underlying documentation regarding eligibility and computation of the credits; therefore, it's important for preparers to ensure that the taxpayer understands that without the proper documentation, the credit could be disallowed. UltraTax CS requires this information for the completion of Form 8867, line 6.
  • Enter
    1
    if the preparer asked the taxpayer whether or not he/she could provide documentation to substantiate the credit eligibility and amount.
  • Enter
    2
    if the preparer didn't confirm this information with the taxpayer.
UltraTax CS requires this information for the completion of Form 8867, line 7.
  • Enter
    1
    if the preparer asked the taxpayer if any credits were disallowed or reduced in a previous year.
  • Enter
    2
    if the preparer didn't confirm this information with the taxpayer.
UltraTax CS automatically answers yes to this question on Form 8867, line 7a, if Form 8862, Information To Claim Earned Income Credit After Disallowance is being filed with the return. Enter
1
or
2
to override the calculated answer on line 7a.
UltraTax CS requires this information for the completion of Form 8867, line 8.
  • If the taxpayer is self-employed and required to file Schedule C/C-EZ, enter
    1
    to indicate Schedule C/C-EZ has been completed correctly based on income and expense detail provided by the taxpayer.
  • Enter
    2
    if Schedule C/C-EZ wasn't completed based on this information.

Due Diligence Questions for Returns Claiming EIC

Use this section to complete additional due diligence information for returns claiming the earned income credit (EIC).
UltraTax CS requires this information for the completion of Form 8867, line 9a.
  • Enter
    1
    if the tie-breaker rules were communicated to the taxpayer in order to verify the taxpayer is eligible to claim the EIC for all qualifying children.
  • Enter
    2
    if the tie-breaker rules weren't explained to the taxpayer such that eligibility wasn't confirmed.
UltraTax CS requires this information for the completion of Form 8867, line 9b.
  • Enter
    1
    if the residency requirements and resulting disallowance were communicated to the taxpayer, despite the fact that the support requirement was otherwise met.
  • Enter
    2
    if the residency requirements weren't thoroughly explained.

Due Diligence Questions for Returns Claiming CTC and/or ACTC

Use this section to complete additional due diligence information for returns claiming the child tax credit (CTC) and/or additional child tax credit (ACTC).
UltraTax CS requires this information for the completion of Form 8867, line 10.
  • Enter
    1
    if all qualifying children resided with the taxpayer claiming the child tax credit (CTC) and/or additional child tax credit (ACTC), then select the correct response in the
    If yes, has it been determined that the taxpayer has not released the claim to another person?
    field.
  • Enter
    2
    if the children didn't reside with the taxpayer, then select the correct response in the
    If no, is Form 8332 or similar statement active and attached to the return?
    field.

Due Diligence Questions for Returns Claiming AOTC

Use this section to complete additional due diligence information for returns claiming the American opportunity tax credit (AOTC).
UltraTax CS requires this information for the completion of Form 8867, line 11.
  • Enter
    1
    if the taxpayer provided Form 1098-T, Tuition Statement, along with any accompanying receipts for qualified tuition and related expenses.
  • Enter
    2
    if the taxpayer didn't provide this information.

Credit Eligibility Certification & Alternate Preparer

Use this section to certify that the answers on this form are true to the best of your knowledge.
UltraTax CS requires this information for the completion of Form 8867, line 12.
  • Enter
    1
    if all answers completed on Form 8867 are certified to be true, correct, and complete.
  • Enter
    2
    if all answers aren't certified to be true.
Enter the preparer name and PTIN of the person who determines the taxpayer's eligibility for, or amount of, the earned income credit, if different from the person who signs the return (Form 1040/1040A/1040EZ/1040NR/1040SS/1040PR). When these fields are blank, UltraTax CS automatically prints the name and PTIN of the preparer indicated on the main return.
Enter the preparer name and PTIN of the person who determines the taxpayer's eligibility for, or amount of, the child tax credit/additional child tax credit, if different from the person who signs the return (Form 1040/1040A/1040EZ/1040NR/1040SS/1040PR). When these fields are blank, UltraTax CS automatically prints the name and PTIN of the preparer indicated on the main return.
Enter the preparer name and PTIN of the person who determines the taxpayer's eligibility for, or amount of, the American opportunity tax credit, if different from the person who signs the return (Form 1040/1040A/1040EZ/1040NR/1040SS/1040PR). When these fields are blank, UltraTax CS automatically prints the name and PTIN of the preparer indicated on the main return.
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