IRS issues final regulations, expanding paid preparer due diligence requirement to head of household filers

IRS issues final , expanding p arer due diligence requirement to head of household filers

IR-2018-216, November 7, 2018

IR-2018-216, November 7, 2018

WASHINGTON — The Treasury Department and the Internal Service today issued final expanding the -standing p arer due diligence requirement to include individual income tax returns claiming the head of household filing status.

WASHINGTON — The Treasury Department and the Internal Service today issued final expanding the -standing p arer due diligence requirement to include individual income tax returns claiming the head of household filing status.

The final , avail in the Federal Register, implement a provision included in the Tax Cuts and Act (TCJA), the tax reform legislation enacted in December 2017. The additional requirement will apply starting with 2018 returns, ared on or after November 7, 2018.

The final , avail in the Federal Register, implement a provision included in the Tax Cuts and Act (TCJA), the tax reform legislation enacted in December 2017. The additional requirement will apply starting with 2018 returns, ared on or after November 7, 2018.

The due diligence requirement was originally designed to reduce errors on returns claiming the Earned Income Tax Credit. Legislation in 2015 expanded the due diligence requirements to include the Child Tax Credit, Additional Child Tax Credit, and American Opportunity Tax Credit. Under the TCJA, the due diligence requirement now also applies to individual income tax returns claiming the head of household filing status. Temporary and proposed were issued in December 2016 to implement the 2015 changes, which today’s also finalized.

The due diligence requirement was originally designed to reduce errors on returns claiming the Earned Income Tax Credit. Legislation in 2015 expanded the due diligence requirements to include the Child Tax Credit, Additional Child Tax Credit, and American Opportunity Tax Credit. Under the TCJA, the due diligence requirement now also applies to individual income tax returns claiming the head of household filing status. Temporary and proposed were issued in December 2016 to implement the 2015 changes, which today’s also finalized.

P arers must submit Form 8867, P arer’s Earned Income Credit , with every tax return claiming any of the covered tax benefits. The form is designed as a to help p arers meet the requirement by obtaining eligibility information from their clients. The form will be revised later this year to reflect the addition of the head of household filing status. P arers are required to keep copies of the form or compar cumentation for their records, which is also subject to review by the IRS.

P arers must submit Form 8867, P arer’s Earned Income Credit , with every tax return claiming any of the covered tax benefits. The form is designed as a to help p arers meet the requirement by obtaining eligibility information from their clients. The form will be revised later this year to reflect the addition of the head of household filing status. P arers are required to keep copies of the form or compar cumentation for their records, which is also subject to review by the IRS.

P arers are subject to a penalty, indexed to inflation, for each failure to comply with the requirement. For tax year 2018, the penalty will be $520.

P arers are subject to a penalty, indexed to inflation, for each failure to comply with the requirement. For tax year 2018, the penalty will be $520.

For on this and other TCJA provisions, visit IRS.gov/taxreform.

For on this and other TCJA provisions, visit IRS.gov/taxreform.


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