8867 overkill

[Nashville]

The concept of the new 8867 has been implemented by people with whom only bureaucrats can identify.

It's hard to populate the answers in such a way that doesn't incriminate yourself, because it requires answers for questions you would never ask, and there's no point in asking. And if a question is true for one factor (EIC), why would it be any different than for another factor (CTC), thus an entire column is duplicated for no reason. Worst of all, attempts to require us to validate information that we possible cannot, given taxpayers lie to us.

Rather than whine about this, are there better alternatives to show the IRS the folly of this 8867? Like maybe flooding their offices with paper returns?

[mastertaxguy]

Form 8867 objections...what would Nashville do?

What would be your specific suggestions to do with, as you phrase it, the concept for form 8867? What changes in the form would you suggest?

We have no problem with the form, or the worksheets our software is generating to 'guide' us through the questions. Not much different than what we have been doing the last few years.

As noted in previous posts, we keep copies of a lot of client documents as back up to positions taken on these "due diligence" forms. Some others have argued such is not necessary but like chicken soup, it can't hurt (apologies to those with various food allergies and such).

If you decide to paper file returns as a protest, be sure to include your due diligence forms or maybe do the returns as 'self prepared' by the taxpayer.

[Nashville]

What Would Nashville Do?

I'll make a couple suggestions but if I had more time I could suggest several more...

1. The question we are supposed to ask if they had EIC rejected in the past? Flush it. If this had happened in the past, the IRS needs to flag social security numbers and give anthem numbers to the customers after appropriate passage of time to file 8692. If this had really happened, 95% of them would deny it, if they even were aware to begin with.
2. I would eliminate much of the cloning in the CTC column and ACTC or other columns. If you answer that a child lived six months with the taxpayer for EIC, how could he not also have lived with the taxpayer for CTC purposes? Do they honestly expect us to ask the same question twice?

Maybe Drake has not yet jumped on the train. All I see is their version of the questionnaire, which they claim by their own admission duplicates the same answer and thus scuttles E-filing. Could be much of my problem is with them. I would think if you answer any question which eliminates further query it would be a simple programming effort to grey out areas so as not to create duplications or ambiguities.

[mastertaxguy]

Keep in mind...

I'll make a couple suggestions but if I had more time I could suggest several more...

1. The question we are supposed to ask if they had EIC rejected in the past? Flush it. If this had happened in the past, the IRS needs to flag social security numbers and give anthem numbers to the customers after appropriate passage of time to file 8692. If this had really happened, 95% of them would deny it, if they even were aware to begin with.
2. I would eliminate much of the cloning in the CTC column and ACTC or other columns. If you answer that a child lived six months with the taxpayer for EIC, how could he not also have lived with the taxpayer for CTC purposes? Do they honestly expect us to ask the same question twice?

Maybe Drake has not yet jumped on the train. All I see is their version of the questionnaire, which they claim by their own admission duplicates the same answer and thus scuttles E-filing. Could be much of my problem is with them. I would think if you answer any question which eliminates further query it would be a simple programming effort to grey out areas so as not to create duplication or ambiguities.

Well...

Your point 2. Keep in mind that column "a" questions on EIC are for EIC only; if no EIC but regular or additional child tax credits then column B answers are made; and if neither columns "A" or "B" are involved but American Opportunity Credits are involved, then only column C. So far, we have not had any issues with leaving column "A" blank but completing either columns B or C as the case may be.

I arbitrarily consider the EIC column column A, Child Tax Column B, American Opportunity Credit Column C.

Personally, we like this one more than the earlier versions of 8867, but that is just us. We complete it with the taxpayer/client looking in. It often helps jog their memories.

[Rapid Robert]

thus an entire column is duplicated for no reason.

Perhaps someone is not using every column, because they don't all apply?

Worst of all, attempts to require us to validate information that we possible cannot, given taxpayers lie to us.

Yes, many of our fellow citizens are liars, cheaters, and crooks. Ditto for some paid tax preparers. Don't blame IRS for this, Congress passed the law.

Rather than whine about this, are there better alternatives to show the IRS the folly of this 8867? Like maybe flooding their offices with paper returns?

Yes, I think this is the best course of action for you.

[David1980]

"No" is a valid choice on the form?

[Jiggers]

I just wish that there was a good questionnaire or form someone that has developed that asks the questions, and gives information on what forms/information to request to support the answers, and help us avoid a penalty.

If you use the 8867 and answer the questions, most can be answered without having any documentation, and that is not sufficient according to the IRS.

I do no EIC returns except one or two from long-time clients. I do several returns with CTC and AOTC for long-time clients.

I have tried to put together a yes/no form that I can go over with the clients, but most of the questions are rediculous and really don't apply.

I have seen forms or questionnaires that others have developed, but none fit my type of practice.

[RitaB]

I will add

I share some of the frustrations, but I think for too long, there have been tax preparers that coach people toward EIC. Say, fudging the time lived with the parent or something like that. Maybe this burden to keep a copy of what we were already supposed to be relying upon will cut down on that. I keep copies of everything, so it's not a change for me.

Also, the Instructions for Form 8867 have some pertinent, well, instructions, that are helpful. For example, how to answer line 9 for people who have no children but qualify for EIC:

"Line 9
If your client is eligible to claim the EIC for taxpayers without a qualifying child, answer “yes” to questions 9a and 9b."

https://www.irs.gov/pub/irs-pdf/i8867.pdf

[mooretax]

Send IRS suggestions to improve the form

1) Go to irs.gov/forms
Click More information.
Click Send us feedback.

2) You can fill out the form 1385-A reducing tax burden on America's taxpayers
and follow the instruction to email at the bottom of the form.

[DonB]

Question 5

Record Retention:

What documents are there which determine eligibility for EIC, CTC, ACTC that I can rely on? Can the TP provided documents proving the child lived with them more than 6 months? Can they provide documents proving no one else will claim the credit? Can they provide documents proving no other relative is in the household? I think not on these three, so I am left with taking the clients word.

The only document I can think of for me to rely on is a Birth Certificate. My few EICs are with families I know. Ask for a copy of the B.C.? Maybe yes. Or check NO?

[David1980]

School records/medical records for me show that at least the child lived with the taxpayer at some point during the tax year.

The common fraud of passing SS cards around because "I'm not claiming my child this year you can have them" usually won't go to the extent of changing school records. True, it's not proof that the child lived with the taxpayer more than 6 months. But it's better than nothing and shows I did some checking at least.

I don't subscribe to the thought process that if I can't have documentation that proves inconclusively that my client is qualified that there's no point in obtaining any documentation at all. I'm willing to accept documentation to support the claim even if it's not incontrovertible proof of the claim. I don't believe in all or nothing documentation.

[DonB]

Excellent points David. I would use these on a new client. I have two EICs coming. One I have known the grandparents for years, the other is my granddaughter. ????