EIC Question

[geekgirldany]

I've just started preparing individual tax returns for the year and noticed the EIC worksheet in Taxwise is asking alot more information. One of which is Due Diligence on part of the tax preparer.

One of the questions was a social security card that allows the person to work in the US. That if it is stamped "not valid for work" then the credit can not be taken.

Some of these folks I have been doing their taxes for several years. Should I ask to see Social Secuirty Cards again and make copies to keep on file? And I know I should ask them the questions on the the EIC Worksheet/Form 8867.

[thomtax]

SS cards

I don't know about others, but I always make a copy of the ss cards in case something comes up in the future. One or two of the clients have later lost their card and came back and asked for a copy. Hopefully, this builds a little goodwill and loyalty.

LT

[Gretel]

Some of these folks I have been doing their taxes for several years. Should I ask to see Social Secuirty Cards again and make copies to keep on file? And I know I should ask them the questions on the the EIC Worksheet/Form 8867.

I was surprised about the same thing. I decided that, if this is a client from a previous or earlier year, I don't ask for additional copies of anything. I always make a copy of their social security card when I get a new client. I also will not make any notes how, when and from whom I received the info if this is prior year client. Enough is enough.

If I get a new client and anything is questionable I will ask a lot of questions and make notes.

[taxmandan]

Explain the form 8867 to them and have them sign it as true and correct on all counts as to their dependent meeting the qualifications. Keep a copy of the signed 8867 and that meets the due diligence requirement vs. EITC for a tax practitioner.

[Jesse]

The Form 8867 has changed, the prior form had a signature line for the taxpayer to sign - optional just to keep in your files.

I really dislike this new Form w/out the signature line so I made an extra page which I typed in a note something similar to "By signing this form you are declaring the this 2006 EIC checklist Form 8867 was reviewed and is true and correct to the best of your knowledge", I then walk them through the Form 8867 and have them sign it.

[thomtax]

Signature line on 8867

The form 8867 that is produced by Drake is now a 3 page form, not 2 as before. It still has the same signature lines on it.

LT

[Larmil]

The form 8867 that is produced by Drake is now a 3 page form, not 2 as before. It still has the same signature lines on it.

LT

Taxworks is the same way - with signature line.

[Jesse]

I use Proseries - it is 3 pages with no signature line.

[geekgirldany]

Thank you all for answering. I will probably just tell people when they call to make an appointment to bring all social security cards. That I am updating my files and if they are getting EIC I have to see them.

My page 3 does not have a signature line on it. I use Taxwise.

[ChEAr$]

that form 8867

I saw that in TAxwise also, but IF I remember right, we are not required to even fill it out.
I'ts just "suggested" by IRS for compliance.

And I would never, ever, photocopy a Social Security card of a client.

[taxmandan]

I saw that in TAxwise also, but IF I remember right, we are not required to even fill it out.
I'ts just "suggested" by IRS for compliance.

And I would never, ever, photocopy a Social Security card of a client.

You are correct, but the IRS says if you have a signed 8867 it meets the requirement for due diligence by the preparer, thus no penalty if it is found that the taxpayer wasn't entitled to the EITC.

[Gretel]

Wait a second.

The taxpayer actually has nothing to do with this form. We are the ones who have to proof due diligence so, if at all, we should be signing it, right?

[jainen]

dig out that citation

>>the IRS says if you have a signed 8867 it meets the requirement for due diligence by the preparer, thus no penalty if it is found that the taxpayer wasn't entitled to the EITC.<<

If you wouldn't mind, taxmandan, just remind us where exactly the IRS says that. 'Cause my understanding is just the opposite. 8867 is all about the tax preparer and nothing about the taxpayer. The official version of the form doesn't even have a place for the taxpayer to sign, and if you think keeping that list in your file will shift your responsibilities onto your client, you really need to dig out that citation for us.

[S T]

So no copy of SS card

So what are the options if not to copy the SSN card, would you prepare a statement, and have the client sign that their SS card is clear, and not marked for "not valid for work". Boy this is a double negative and took me a while to get through. And then also have them sign the form 8867??

Fortunately for me I do little with EIC, and I have standing long term clients and their families!

Sandy

[geekgirldany]

The "not valid for work" is what I am concerned about. I can say yes I saw it and it was not stamped with this. But wouldn't a copy of it be better to back me up? I think so. 8867 is for our purposes only. To make sure we ask our clients these questions. I guess having them sign a little statement as Jesse suggested would also be a good backup.

Just a side note... for me I don't even know where my social security card is at! I looked for it today and it isn't in my wallet. I've got to hunt it down.