Publication 4687

Publication 4687

A brochure published by the IRS setting due diligence requirements by which tax preparers must abide in claiming the earned income tax credit for their clients.
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The IRS says, in Publication 4687, that "Due Diligence is more than a check mark on a form or clicking through tax preparation software," and it spells out four due-diligence requirements that the IRS wants return preparers to meet to accurately determine if a taxpayer is eligible to claim the EITC and accurately compute the credit amount.
In Publication 4687, the IRS says preparers must do four things to comply with the EITC due-diligence requirements:
Publication 4687 specifies that under the due-diligence requirement, a preparer must ask the taxpayer additional questions "if a reasonable and well-informed tax return preparer, knowledgeable in the law, would conclude the information furnished seems incorrect, inconsistent or incomplete.
Publication 4687 gives examples of situations in which the practitioner should ask further questions to fulfill the due-diligence requirement.
Publication 4687 on EITC due diligence identifies three common errors that account for more than 60% of erroneous claims.
Publication 4687, EITC Due Diligence Brochure, outlines tax return preparers' responsibilities and potential sanctions for the 2011 filing season.
The IRS includes a copy of Publication 4687 with each letter.