Due Diligence and Penalties



This course will cover tax preparer due diligence and penalties. When the taxpayer files a return with refundable credits the tax preparer needs to complete an accurate tax return and complete Form 8867, which is attached to the taxpayer’s return. The following refundable credits will be discussed in this course:

  • Earned Income Credit (EIC).
  • Child Tax Credit (CTC).
  • Additional Child Tax Credit (ACTC).
  • Other Dependent Credit (ODC).
  • American Opportunity Tax Credit (AOTC).


At the end of this lesson, the student will:

Identify the due diligence requirements of the tax preparer when completing a tax return with refundable credits.

Explain what documentation must be maintained by the IRS when preparing refundable credits tax returns.

Understand what documents the tax preparer should maintain for their records.

Field of Study: Behavioral Ethics 2 Hours
Course Level: Basic to Intermediate
Prerequisite: General tax preparation knowledge is not required.
Delivery Method: Self-Study
Expiration Date to earn CEs: July 1, 2023.

IRS: 15G0B-E-00554-22-S
CTEC: 2080-CE-0019

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