Form 8867 covers the EIC, the CTC/ACTC, and/or the AOTC. You should only complete columns corresponding to credits actually claimed on the taxpayer’s return that you prepared.
Only paid tax return preparers should complete this form. If you were paid to prepare a return for any taxpayer claiming the EIC, the CTC/ACTC, and/or the AOTC, you must complete Form 8867 and meet the other due diligence requirements described in Purpose of Form, later.
Form 8867 must be filed with the return
Form 8867 must be filed with the taxpayer’s return or amended return claiming the EIC, the CTC/ACTC, and/or the AOTC.
Signing tax return preparers
- If you are the paid tax return preparer signing the return and you are filing the return electronically, file the completed Form 8867 electronically with the return.
- If you are the paid tax return preparer signing the return and you are not electronically filing the return, provide the completed Form 8867 to the taxpayer with instructions to file this form with his or her return.
- If you are the paid tax return preparer signing the return and you are mailing the return to the IRS for the taxpayer (which should only be done after the taxpayer has reviewed and signed the paper return), mail the completed Form 8867 to the IRS with the return.
Purpose of Form
As a paid tax return preparer, you are required to exercise due diligence when preparing any client’s return or claim for refund. As part of exercising due diligence, you must interview the client, ask adequate questions, and obtain appropriate and sufficient information to determine the correct reporting of income, claiming of tax benefits (such as deductions and credits), and compliance with the tax laws.
As a paid tax return preparer, you also must meet specific due diligence requirements set forth in Treasury Regulations when you prepare returns and claims for refund involving the EIC, the CTC/ ACTC, or the AOTC. To meet these due diligence requirements, you may need to ask additional questions and obtain additional information to determine eligibility for, and the amount of, the EIC, the CTC/ACTC, or the AOTC. Failure to meet the EIC, CTC/ACTC, or the AOTC due diligence requirements could result in a $510 penalty for each failure.
You have complied with the due diligence requirements set forth in Treasury Regulations for the EIC, the CTC/ACTC or the AOTC claimed on a return or claim for refund if you:
- Complete Form 8867 truthfully and accurately and complete the actions described on Form 8867 for each credit claimed for which you are the paid tax return preparer.
- Submit Form 8867 in the manner required.
- Meet the knowledge requirement by interviewing the taxpayer, asking adequate questions, contemporaneously documenting the questions and the taxpayer’s responses in your notes, reviewing adequate information to determine if the taxpayer is eligible to claim the credit(s) and in what amount(s), and
- Keep all five of the following records for three years from the latest of the dates specified later, in Document Retention:
- A copy of Form 8867,
- The applicable worksheet(s) or your own worksheet(s) for any credits claimed (see Due Diligence Requirements, later),
- Copies of any documents provided by the taxpayer on which you relied to determine eligibility for, and the amount of, the credit(s),
- A record of how, when, and from whom the information used to prepare Form 8867 and worksheet(s) was obtained, and
- A record of any additional questions you may have asked to determine eligibility for, and amount of, the credits, and the taxpayer’s answers.