Tax preparer due diligence rules are finalized
The IRS on Tuesday finalized proposed regulations under Sec. 6695(g) imposing a penalty on tax return preparers who do not follow certain due-diligence requirements when preparing to file returns for taxpayers who are claiming head-of-household filing status, the earned income tax credit (EITC), the child tax credit, the additional child tax credit (ACTC), or the American opportunity tax credit (T.D. 9842). The IRS said it was adopting the existing proposed regulations without substantive change, other than adding some examples. It also removed the temporary regulations that were issued with the proposed regulations in 2016.
The Protecting Americans From Tax Hikes Act, P.L. 114-113, amended Sec. 6695 to apply to tax return preparers who fail to exercise due diligence when preparing a taxpayer’s return with a claim for the child tax credit or ACTC under Sec. 24 or the American opportunity tax credit under Sec. 25A.. Read more on the Journal of Accountancy.