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Course Details

EITC Due Diligence (Course Id 871)

Updated / QAS / Registry / EA   Add to Cart 
Author : Paul Winn, CLU, ChFC
Status : Production
CPE Credits : 3.0
IRS Credits : 3
Price : $44.95
Passing Score : 70%
NASBA Technical: Yes
Primary Subject-Field Of Study:

Taxes - Taxes for Course Id 871

Description :

The Earned Income Credit (EIC) is a refundable tax credit that has a significant impact on United States revenue. It is also the source of a disproportionately large number of errors in tax returns in which a claim for it is made. In a recent year, 147 million individual federal tax returns were filed, and about 17% claimed the Earned Income Credit. Based on that percentage, it would not be unexpected that, in the years ahead, approximately one taxpayer in every six will claim the EIC. Approximately 70% of federal income returns claiming the earned income credit are prepared by professional tax return preparers.

This course briefly summarizes the earned income credit rules, examines the common errors committed when claiming the credit, discusses the EIC due diligence requirements imposed on professional tax return preparers, and identifies the sanctions to which preparers and their employers may be subject for a failure to meet expected due diligence requirements.

Usage Rank : 0
Release : 2016
Version : 1.0
Prerequisites : None.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : Self-Study.
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 09-Jan-2016
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - NASBA Registry - IRS Enrolled Agents - 871

Keywords : Taxes, EITC, Due, Diligence, cpe, cpa, online course
Learning Objectives :

Course Learning Objectives

Upon completion of this course, you should be able to:
    Recognize the earned income credit eligibility rules;
    List the common errors committed in connection with claiming the earned income credit;
    Describe the consequences for the taxpayer of the IRS disallowance of the earned income credit;
    Identify the tax return preparers earned income credit due diligence requirements; and
    List the sanctions that may be applied on a tax return preparer and his or her employer for a failure to meet due diligence requirements.

Chapter 1
Earned Income Credit Rules

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
Due Diligence Requirements

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 clients 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 clients tax return claiming the earned income credit;
    Recognize the sanctions that may be imposed on an employer whose employee fails to comply with EIC due diligence requirements; and
    Identify the additional requirements imposed on taxpayers claiming the EIC following disallowance and the exceptions to those requirements;
Course Contents :

Course Learning Objectives

Introduction to the Course

Chapter 1 Earned Income Credit Rules

Learning Objectives


Nature of the Earned Income Credit

Earned Income Credit Eligibility

Eligibility Rules Applicable to Everyone

Eligibility Rules Applicable to Taxpayers with a Qualifying Child

Eligibility Rules Applicable if Taxpayer Does Not Have a Qualifying Child

Common Earned Income Credit Errors

Earned Income Credit Errors Involving Qualifying Children

Qualifying Child Requirements

When a Child is Disabled

When Two Taxpayers Claim a Qualifying Child

Tie-Breaker Rules

Earned Income Credit Errors Involving a Clients Filing Status

Single Filing Status

Head of Household Filing Status

Married Persons Living Apart

Earned Income Credit Errors Involving Income Reporting

Earned Income Credit Errors Involving Social Security Numbers


Chapter Review

Chapter 2 Due Diligence Requirements

Learning Objectives


The Statutory Requirement for Due Diligence IRC 6695

Specific Requirements Applicable to EIC Due Diligence

Eligibility Checklist IRS Form 8867

Due Diligence Questions to Ask to Avoid Qualifying Child Errors

Avoiding Filing Status Errors

Avoiding Income Reporting Errors

Avoiding Social Security Number Earned Income Credit Errors

Eligibility Checklist Best Practices

Figuring the Amount of the Earned Income Credit

Calculating Earned Income for EIC Purposes

Taxpayers Not Self-Employed, Statutory Employees, Clergy or Church Employees

Self-Employed Taxpayers, Statutory Employees, Clergy and Church Employees

Computation Best Practices

Know the Law and the Client

When Should a Preparer Ask Additional Questions Examples

Knowledge Requirement Best Practices

Record Maintenance

Record Maintenance Best Practices

Failure to Meet Due Diligence Requirements

Consequences for the Tax Return Preparer

Consequences for the Preparers Employer

Consequences for the Client of EIC Disallowance

Disallowance Due to Reckless or Intentional Disregard of EIC Rules

Disallowance Due to Fraud

Claiming EIC after Disallowance

IRS Form 8862 Timing

Filing IRS Form 8862



Chapter Review

Appendix A Worksheet A

Appendix B Worksheet B


Taxes Course 871 Home: https://www.cpethink.com/tax-cpa-courses
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