8867 documents

[JenMO]

I live in a small community and know most of my clients and their family situations. Is personal knowledge accepted?

[Dude]

Just note it. You only have to collect documents if provided.

[dtlee]

I think there are a couple of ways to interpret the final regulations, but each of us must make these interpretations on our own. I am not going to comment on the last response except to quote from the examples in the final regulations §1.6695-2(b)(3)(ii) (Example 6 is fairly close to your scenario):

(E) Example 5. In 2019, S engages Preparer E to prepare S's 2018 federal income tax return. During Preparer E's standard intake interview, S states that S has never been married and that S's niece and nephew lived with S for part of the 2018 tax year. Preparer E believes S may be eligible to file as head of household and claim each of these children as a qualifying child for purposes of the EIC and the CTC, but the information furnished to Preparer E is incomplete. To meet the knowledge requirement in paragraph (b)(3) of this section, Preparer E must make reasonable inquiries to determine whether S is eligible to file as head of household and whether each child is a qualifying child for purposes of the EIC and the CTC, including reasonable inquiries about the children's residency, S's relationship to the children, the children's income, the sources of support for the children, and S's contribution to the payment of costs related to operating the household, and Preparer E must contemporaneously document these inquiries and the responses.

(F) Example 6. Assume the same facts as the facts in Example 5 of paragraph (b)(3)(ii)(E) of this section. In addition, Preparer E knows from prior social interactions with S that the children resided with S for more than one-half of the 2018 tax year and that the children did not provide over one-half of their own support for the 2018 tax year. To meet the knowledge requirement in paragraph (b)(3) of this section, Preparer E must make the same reasonable inquiries to determine whether S is eligible to file as head of household and whether each child is a qualifying child for purposes of the EIC and the CTC as discussed in Example 5 of this section, and Preparer E must contemporaneously document these inquiries and the responses.

[ToddFogelberg]

Even with "personal knowledge", I recommend getting a very basic due diligence document filled out by the client and signed. Mine covers the major points...all income reported, marital status on last day of the year, who lived in the household and for how long. It doesn't cover 100% but it takes the client 2 minutes to fill out and sign and into the file it goes. The signature on the 8879 is meaningless in my opinion, since it is done mechanically and no one reads the jurat. You can see the one I use (have it reviewed by a lawyer) on my website (home page). www.toddstaxservice.com

[Dude]

I think there are a couple of ways to interpret the final regulations, but each of us must make these interpretations on our own. I am not going to comment on the last response except to quote from the examples in the final regulations §1.6695-2(b)(3)(ii) (Example 6 is fairly close to your scenario):

Yep just note it