EITC Due Diligence
Field of Study:
The Earned Income Tax Credit (EITC) 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, 150.3 million individual federal tax returns were filed, and more than 27.4 million—18.2% claimed the Earned Income Credit1. Based on that percentage, it would not be unexpected that, in the years ahead, approximately one taxpayer in every five will claim the EITC. 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 EITC 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.
After completing this course you will 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 preparer’s 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.
Type of delivery method:
Recommended CPE credits:
Final examination expiration date:
The program participant will have one year from the date of purchase to complete the course and final examination.
Web CPE is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org