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Screen 8867 - Due Diligence Checklist (EIC, CTC/ACTC, AOTC)
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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).
Information provided by taxpayer and/or reasonably obtained...
UltraTax CS requires this information for the completion of Form 8867, line 1.
- Enter1if information provided by the taxpayer and/or reasonably obtained by the preparer was obtained to complete the return.
- Enter2if the taxpayer and/or preparer didn't provide and/or obtain this information.
Questions & answers asked/documented to determine...
UltraTax CS requires this information for the completion of Form 8867, line 3a.
- Enter1if questions and answers were properly asked and documented to determine the taxpayer’s eligibility for claiming the credits.
- Enter2if questions and answers weren't asked and documented.
Adequate information reviewed to determine eligibility...
UltraTax CS requires this information for the completion of Form 8867, line 3b.
- Enter1if adequate information was reviewed in an effort to determine the taxpayer’s eligibility for and amount of the credits.
- Enter2if adequate information wasn't reviewed.
Did any information provided by taxpayer, third party, ...
UltraTax CS requires this information for the completion of Form 8867, line 4.
- Enter1if 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.
- Enter2if all information appeared to be correct.
Were reasonable inquiries made to determine the correct/complete information?
UltraTax CS requires this information for the completion of Form 8867, line 4a.
- Enter1if reasonable inquiries were made in order to determine information provided by the taxpayer or 3rd party was both correct and complete.
- Enter2if reasonable inquiries weren't made to validate the information provided.
Were the inquires documented?
UltraTax CS requires this information for the completion of Form 8867, line 4b.
- Enter1if all inquires made of the taxpayer or third party were contemporaneously documented.
- Enter2if the inquires weren't appropriately documented.
Copies of document(s) provided by taxpayer ... retained?
UltraTax CS requires this information for the completion of Form 8867, line 5.
- Enter1if copies of all documents provided by the taxpayer, and subsequently used to determine the credit eligibility and amount, were retained by the preparer.
- Enter2if the preparer didn't keep copies of these documents.
Documents used to determine credit eligibility/amount
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.
Did you ask the taxpayer whether he/she could provide documentation...
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.
- Enter1if the preparer asked the taxpayer whether or not he/she could provide documentation to substantiate the credit eligibility and amount.
- Enter2if the preparer didn't confirm this information with the taxpayer.
Did you ask the taxpayer if any credits were disallowed/reduced in a previous year?
UltraTax CS requires this information for the completion of Form 8867, line 7.
- Enter1if the preparer asked the taxpayer if any credits were disallowed or reduced in a previous year.
- Enter2if the preparer didn't confirm this information with the taxpayer.
If credits were disallowed/reduced, did you complete the required recertification form(s) (Force)?
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.Schedule C completed correctly...
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, enter1to indicate Schedule C/C-EZ has been completed correctly based on income and expense detail provided by the taxpayer.
- Enter2if 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).
If any child is the qualifying child of more than one person...
UltraTax CS requires this information for the completion of Form 8867, line 9a.
- Enter1if 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.
- Enter2if the tie-breaker rules weren't explained to the taxpayer such that eligibility wasn't confirmed.
If the taxpayer didn’t live with the child for over half the year...
UltraTax CS requires this information for the completion of Form 8867, line 9b.
- Enter1if the residency requirements and resulting disallowance were communicated to the taxpayer, despite the fact that the support requirement was otherwise met.
- Enter2if 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).
Did all qualifying children reside with the taxpayer...
UltraTax CS requires this information for the completion of Form 8867, line 10.
- Enter1if 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 theIf yes, has it been determined that the taxpayer has not released the claim to another person?field.
- Enter2if the children didn't reside with the taxpayer, then select the correct response in theIf 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).
Did the taxpayer provide Form 1098-T and receipts...
UltraTax CS requires this information for the completion of Form 8867, line 11.
- Enter1if the taxpayer provided Form 1098-T, Tuition Statement, along with any accompanying receipts for qualified tuition and related expenses.
- Enter2if 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.
All answers on Form 8867 certified to be true, correct and complete?
UltraTax CS requires this information for the completion of Form 8867, line 12.
- Enter1if all answers completed on Form 8867 are certified to be true, correct, and complete.
- Enter2if all answers aren't certified to be true.
note
Any failure to meet due diligence requirements with respect to claiming the EIC, the AOTC, and/or the CTC/ACTC may result in a $510 penalty for each failure to comply.
EIC preparer name / PTIN
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.
note
UltraTax CS generates a separate unit of Form 8867 for each unique preparer identified on the 8867 screen. Per IRS instructions, if more than 1 Form 8867 is present, only 1 form may be filed. Therefore, if there are multiple Forms 8867, the Form 8867 prepared by the signing preparer (indicated in UltraTax CS by the preparer identified in
File
, then Client Properties
) will be marked to print/transmitted in the e-file. Any additional units of Form 8867 will calculate, but won't be marked to print/transmitted in the e-file. If there are multiple Forms 8867, but none were prepared by the signing preparer, the Form 8867 covering the EIC will be marked to print/transmitted in the e-file, or if no EIC is present then the form covering the CTC, or if no CTC, the AOTC.CTC/ACTC preparer name / PTIN
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.
note
UltraTax CS generates a separate unit of Form 8867 for each unique preparer identified on the 8867 screen. Per IRS instructions, if more than 1 Form 8867 is present, only 1 form may be filed. Therefore, if there are multiple Forms 8867, the Form 8867 prepared by the signing preparer (indicated in UltraTax CS by the preparer identified in
File
, then Client Properties
) will be marked to print/transmitted in the e-file. Any additional units of Form 8867 will calculate, but won't be marked to print/transmitted in the e-file. If there are multiple Forms 8867, but none were prepared by the signing preparer, the Form 8867 covering the EIC will be marked to print/transmitted in the e-file, or if no EIC is present then the form covering the CTC, or if no CTC, the AOTC.AOTC preparer name / PTIN
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.
note
UltraTax CS generates a separate unit of Form 8867 for each unique preparer identified on the 8867 screen. Per IRS instructions, if more than 1 Form 8867 is present, only 1 form may be filed. Therefore, if there are multiple Forms 8867, the Form 8867 prepared by the signing preparer (indicated in UltraTax CS by the preparer identified in
File
, then Client Properties
) will be marked to print/transmitted in the e-file. Any additional units of Form 8867 will calculate, but won't be marked to print/transmitted in the e-file. If there are multiple Forms 8867, but none were prepared by the signing preparer, the Form 8867 covering the EIC will be marked to print/transmitted in the e-file, or if no EIC is present then the form covering the CTC, or if no CTC, the AOTC.