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2 hours
CTEC IRS NASBA

Earned Income Tax Credit and Preparer Responsibilities

Course Description:

The recent economic downturn and expansion of the Earned Income Tax Credit ("EITC") means that more and more professional preparers will be encountering clients who may be eligible for the credit. While this might be welcomed news for taxpayers, it presents a minefield of dangers for preparers. Unlike other tax credits, the EITC imposes special compliance burdens on those who prepare the return, exposing tax professionals to potentially severe consequences for a lack of due diligence. In this environment there is no substitute for a thorough understanding of preparer obligations.

This course explores the general requirements for the EITC and focuses on the preparer's responsibilities when undertaking to prepare a return claiming the credit. The due diligence requirements are set forth in detail, with examples illustrating the application of the basic principles involved. After completion of this course you will be sufficiently acclimated to the EITC preparer rules to confidently prepare returns for lower income clients.

Learning Objectives:

  • Recognize key definitions and terms used when discussing the EITC, such as earned income, due diligence, and qualifying child
  • Calculate refunds using threshold numbers, and tax liability and payment data
  • Identify EITC error rates, frequency of fraudulent returns, and preparer penalties
  • Identify the various steps within the due diligence process, including requirement for Form 8867 and preparer obligation to evaluate information provided by the taxpayer
  • Recognize the eligibility requirements for the EITC
  • Identify record-keeping requirements associated with EITC credit documentation

Who Should Attend: All tax practitioners advising individual and business clients
Course Level: Intermediate
Prerequisite: None
Delivery Method: QAS / Self Study
Expiration: In accordance with NASBA standards, access to this course will terminate one year from the date of purchase. Incomplete courses will no longer be accessible beyond the one year deadline.

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