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For a return or claim for refund filed in 2023, the penalty that can be assessed against you is $560 per failure. Therefore, if due diligence requirements are not met on a return or claim for refund claiming the EITC, CTC/ACTC/ODC, AOTC and HOH filing status, the penalty can be up to $2,240 per return or claim.
Evaluate the information received from the client. Apply a consistency and reasonableness standard to the information. Make additional reasonable inquiries when the information appears to be incorrect, inconsistent, or incomplete. Document additional inquiries and the clients response.
The penalty for returns or claims for refund submitted in 2022 is $545 for each failure to include the form when required. The penalty amount is adjusted annually for inflation.
The penalty for not meeting due diligence requirements is $560* for each credit (EITC, CTC/ACTC/ODC and AOTC), or HOH filing status claimed on a 2022 tax return.
This checklist is a comprehensive tool to use when preparing Form 8867, Paid Preparers Due Diligence Checklist, that is associated with claiming the earned income tax credit, American opportunity tax credit, child tax credit (including the additional child tax credit), the credit for other dependents and head-of-
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The penalty for not meeting due diligence requirements is $560* for each credit (EITC, CTC/ACTC/ODC and AOTC), or HOH filing status claimed on a 2022 tax return.
Penalties for Violating Due Diligence Requirements For 2021, the due diligence penalty is $545. And thats for each failure not for each return. Thus, if a preparer fails to perform due diligence for a return that claims all four tax benefits, the penalty for that return is $2,180.
Due Diligence Requirements: Complete and Submit Eligibility Checklist. Complete Form 8867, Paid Preparers Earned Income Credit Checklist, to make sure you consider all EITC eligibility criteria for each return prepared. Computing the Credit. Knowledge. Keeping Records.

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