Check the "Other" Box (box l) with an explanation when you know the client. Simply explain that you know the parents and the kids personally. No need for any documentation when you have personal knowledge of the circumstances that go beyond the normal client/preparer relationship. The knowledge requirement is satisfied when you KNOW the family personally.
Reg. ยง1.6695-2(b)(3) says a tax return preparer must make reasonable inquiries if a reasonable and well-informed tax return preparer knowledgeable in the law would conclude that the information furnished appears to be incorrect, inconsistent, or incomplete. It goes on to say that you must document the reasonable inquiries made. Thus if a reasonable and well-informed tax return preparer knowledgeable in the law would conclude that the information furnished appears to be correct, due to the fact that the tax return preparer has personal knowledge of the family and their circumstances, then there is no requirement to document that knowledge. The regs only mention the documentation requirement when you have reason to believe there is something wrong.
That's my opinion and that's what I intend to do.
Reg. ยง1.6695-2(b)(3) says a tax return preparer must make reasonable inquiries if a reasonable and well-informed tax return preparer knowledgeable in the law would conclude that the information furnished appears to be incorrect, inconsistent, or incomplete. It goes on to say that you must document the reasonable inquiries made. Thus if a reasonable and well-informed tax return preparer knowledgeable in the law would conclude that the information furnished appears to be correct, due to the fact that the tax return preparer has personal knowledge of the family and their circumstances, then there is no requirement to document that knowledge. The regs only mention the documentation requirement when you have reason to believe there is something wrong.
That's my opinion and that's what I intend to do.
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