New Form 8867

[Gene V]

From Vern Hoven Western CPE

E Tax Alert™
IRS releases draft of new Form 8867 - Read it and weep.

On July 20, the IRS released a draft of the 2016 Form 8867 - Paid Preparer's Due Diligence Checklist.

In our tax practice, we have been completing the Form 8867 for several years as part of our compliance requirements when claiming the earned income credit (EIC) on a client’s return. Beginning for 2016 returns, new legislation requires that we complete the same checklist when preparing a return that claims the child tax credit (CTC) or the American Opportunity Tax Credit (AOTC).

There are lots of changes to the form. It’s grown from one page to two pages and from seven “yes/no” questions to 20. .

[Jiggers]

Obviously a time to also plan on raising our fee for the 8867!

[kathyc2]

The draft version of the form can be found here: https://www.irs.gov/pub/irs-dft/f8867--dft.pdf

[beck]

Thanks for the heads up!

Beck

[taxmom34]

IRS will be holding returns with these credits for a few weeks, it looks like this is their way of verifying the information provided by paid tax preparers on the return to cut down on fraudulent early filings.

[Jiggers]

IRS will be holding returns with these credits for a few weeks, it looks like this is their way of verifying the information provided by paid tax preparers on the return to cut down on fraudulent early filings.

About time.

[Snaggletooth]

Giving Away the CTC

Without digesting the new form, is there anything which prohibits a custodial spouse from giving away the CTC to a non-custodial spouse who is also claiming a child via Form 8332?

If this happens, there will be weeping and gnashing of teeth.

[David1980]

Without digesting the new form, is there anything which prohibits a custodial spouse from giving away the CTC to a non-custodial spouse who is also claiming a child via Form 8332?

If this happens, there will be weeping and gnashing of teeth.

No, in fact the new 8867 even covers 8332 - see question 10b and 10c.

10b: "Did you ask if there is an active Form 8332, Release/Revocation of Claim to Exemption for Child by Custodial Parent, or a similar statement in place and, if applicable, did you attach it to the return?"

10c: "Have you determined that the taxpayer has not released the claim to another person?"

[Burke]

I looked at it. I like it. Hope it works!!