Recent Tax Updates

Revised Form 8867 and the Expansion of Preparer Due Diligence Requirements

September 21, 2016

The IRS has released a draft of the newly revised and renamed Form 8867 (Paid Preparer’s Due Diligence Checklist). The changes are a result of the expansion of the paid preparer’s due diligence requirements (as included in the PATH Act) to cover the Child Tax Credit and the American Opportunity Education Credit as well as the Earned Income Tax Credit.

As a result of the expansion of the due diligence requirements, the Form 8867 has been revised as follows:

  • Renamed to “Paid Preparers Due Diligence Checklist.” Was named the Paid Preparer’s Earned Income Credit Checklist.
  • The questions related to qualifying children have been moved from the form to a related worksheet. These questions must still be asked, however, they will not be submitted to the IRS. The requirement to ask these questions are covered in question 2 of the revised 2016 Form 8867.
  • The questions are more focused on ensuring that the preparer is satisfying the knowledge requirement and asking questions regarding the claiming of EITC, the Child Tax Credit, and the American Opportunity Education Credit.
  • The form is divided into questions that relate to all three credits and questions that are specifically related to EITC only, Child Tax Credit only, and the American Opportunity Credit only.

For more details on what the new questions are and how the form is laid out see the draft of the 2016 Form 8867 on the IRS website.

For more information on the expanded due diligence requirements see the following: