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.