are you guys having clients sign the 8867 or any other due diligence for eic?
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I started asking for signatures last year or earlier. This year, I have them initial each page and sign and date at the end. -
Form 8867
No. I don't think getting the client's signature on that form does anything to establish that the preparer has performed sufficient due diligence.
Depending on which boxes you check, you are either expected to keep copies of the documents that you relied upon, or you have to make notes, during or immediately after the preparation of the return, and keep those notes on file.
The notes are supposed to reflect what questions you asked, and what answers you got. Having the client sign Form 8867 doesn't prove that you even asked any questions at all.
In certain cases, we may need to ask questions that are not on Form 8867. And there is no way to record the answers on the form. That's not what the form is for.
I think that having the client sign the form does absolutely nothing but give the preparer, and possibly even the client, a false sense of security.
If the client's signature on the form had any real meaning or function, the IRS would have put a space for it on the form.
BMKBurton M. Koss
koss@usakoss.net
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The map is not the territory...
and the instruction book is not the process.Comment
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But, I DO put my notes on the form during the interview and then ask the client to read it to confirm that is what they told me, gave me, etc. Because I have to keep the form anyway, I keep everything together. (But, I have only two EIC clients, thank goodness.)Comment
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I am going ahead and getting them to sign Form 8867 on the 4th page. Not required but still doing it.Comment
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I can't see any harm done by having the client sign it. And it just might help. If nothing else, it proves the tax preparer at the very least discussed something about EIC with the client.Comment
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I did at one time, but since this is a preparer's form, having a client attest to the veracity of some of those items is pointless since no client (or few clients) can explain those rules (like whether or not the taxpayer could be considered a Qualifying Child for EIC purposes and who would win the tiebreaker rules). The form is intended for preparers and having a client sign them would simply mean that they are acknowledging that you are claiming you did due diligence. I don't even show it to them any more.DougComment
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But why?
Since the Form 8867 is essentially a "preparer's form" what earthly purpose can having the client sign it serve?
The form does, of course, automatically get filed with the income tax return so a reasonable argument could be made that the client IS (indirectly) signing it when the return is finalized.
What's next? Having client sign Sch A, and B, and C, and D, and . . . . . ??
FEComment
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With EIC returns better safe than sorry. Last year there was places for them to sign it and they should have added them for this year.Comment
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We're supposed to keep that form and supposed to keep our notes. To keep it simple, I write my notes on the form when I interview the client and have them sign it to show that they were here with me giving me their info themselves. Or so I hope it'll look to the IRS. Why keep two pieces of paper when one will do? I see no reason to invent a new form myself when my due diligence is already listed on that form. For just two EIC clients, I'm not going to make things more complex for myself.Comment
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There has never been a place for the client to sign the IRS provided 8867. The signature line was a Software added item because preparers wanted it. If you would have printed the Form 8867 off irs.gov last year, you would have not had a signature line.
Some preparers believe if you get the taxpayer to answer the questions such as, "Can your child be a qualifying child of any other person?", then that lets them off the hook. The taxpayer has no idea what qualifies a person as a qualifying child, so how can they answer a question like that? It is all about the questions we ask and and answers we get. It is not about what we can get the taxpayer to sign.Comment
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I think it's just Drake that added a signature line to 8867? I agree with Koss, I don't see any benefit to having the taxpayer sign the 8867. Though I suppose having a taxpayer sign the form probably wouldn't do harm either. Just don't think because you have a 8867 signed it means you've met due diligence requirements.Comment
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Well I said "they", I should have said the software company. Yes I know just because I have them sign the form it does not let me off on the due diligence. I don't think it hurts though. I am asking all the questions I should and getting documentation even from people I have known for years. Plus having them sign additional EIC forms that Drake provides. EIC returns are a pain and I am glad to not take new clients with them.Comment
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A couple of years ago I had people sign the form because TaxslayerPro had put a line there for the signature. So I used the line.
This year I am going paperless. I print out a copy of the 8867 that goes with the clients return. Since it is filed with the return they get a copy. But I don't make them sign it.
My copy is not printed out.
I am making copies of 8879, w-2's, 1099's, and their documentation that proves the child lives with them. I scan all of that.
I don't have a lot of EIC clients. The ones I do have are people that I have done for several years and know these are their children and have a right to claim them.
I have made notes in the return that the taxpayer provided the documentation to me. If I don't make any notes, I get a diagnostic. It's not one that won't let me finish the return but it tells me that I haven't made any notes.
I am making better notes on my input sheet as to what they provided but like I said I know these people either personally or through years of being long time clients.
Linda, EAComment
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