Study Guide-EIC Due Diligence

 

The study guide is provided to guide you through the course material in a step by step format.

Course material is a PDF document  “Earned Income Tax Credit Due Diligence.”

Chapter 1 – Earned Income Credit Rules

Assignment: Chapter 1 <<>> Review Questions  Group #1: # 1-5

When you have completed this chapter, you should be able to:

  • Recognize the earned income credit eligibility rules that apply to all taxpayers, that apply to taxpayers who have a qualifying child, and apply to taxpayers without a qualifying child;
  • List the most common earned income credit errors and their potential problem areas; and
  • Identify the additional questions tax preparers need to ask if taxpayer-provided information appears incorrect, inconsistent or incomplete.

Chapter 2– EIC Due Diligence

Assignment: Chapter 2 <<>> Review Questions Group #2: #1-2

When you have completed this chapter, you should be able to:

  • List the due diligence requirements a tax return preparer must meet when preparing a tax return claiming the earned income credit;
  • Recognize the records a tax return preparer is required to keep to support a client’s claim for the earned income credit;
  • Identify the penalties that may be imposed on a tax return preparer for failing to comply with due diligence requirements when preparing a client’s tax return claiming the earned income credit; and
  • Identify the sanctions that may be imposed on an employer whose employee fails to comply with EIC due diligence requirements.
  • Identify the additional requirements imposed on taxpayers claiming the EIC following disallowance and the exceptions to those requirements.