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Form 1095-B and Form 8867

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    Form 1095-B and Form 8867

    If a child under 17 years of age is listed on a Form 1095-B along with the names of his or her parents, could this document be used to fulfill the due diligence record requirements of Form 8867? Specifically, is it sufficient in addition to interviewing the taxpayer(s) for proving that a child lived with his or her parents for more than half the year in regards to the child tax credit?

    #2
    No, by itself it would not constitute evidence the child is living there.

    Comment


      #3
      Due Diligence Continued

      I have actual medical records relating to the child for a prior year, and I know from interviewing the taxpayer and from having done his taxes for many years that his child lives with him. Should I still be asking for more documentation relating to 2016 for Form 8867 in relation to the child tax credit?

      Comment


        #4
        Can anyone provide me with some feedback in regards to my above question? I'm not sure if I need to ask the taxpayer for more documentation.

        Comment


          #5
          Originally posted by Tax Sleuth View Post
          I have actual medical records relating to the child for a prior year, and I know from interviewing the taxpayer and from having done his taxes for many years that his child lives with him. Should I still be asking for more documentation relating to 2016 for Form 8867 in relation to the child tax credit?
          I would consider that knowledge and experience enough to document your due diligence in regard to whether the child lives there (and the verification from TP in the interview process.) I think most preparers are using that.

          Comment


            #6
            Bad inference

            Both of my "children" were shown on my 1095-B while they were covered by my insurance plan (aged out now). . .and they both lived more than 1,800 miles away at the time.

            I don't like it either, but under the new rules for CTC and Form 8867. . .you need more "proof."

            FE

            Comment


              #7
              "As a paid tax return preparer, when determining the taxpayer’s
              eligibility for, or the amount of, a credit claimed on a return or claim
              for refund, you must not use information that you know, or have
              reason to know, is incorrect. You may not ignore the implications of
              information provided to, or known by you, and you must make
              reasonable inquiries if the information provided to you appears to be
              incorrect, inconsistent, or incomplete. You must make reasonable
              inquiries if a reasonable and well-informed tax return preparer,
              knowledgeable in the tax law, would conclude that the information
              provided to you appears to be incorrect, inconsistent, or incomplete.
              You must also contemporaneously document in your files any
              reasonable inquiries made and the responses to these inquiries"

              The question in my mind would be what is it that appears to be incorrect, in consistent, or incomplete? I am not in the practice of requiring documentation from all taxpayers.

              Comment


                #8
                Re "practice of requiring documentation" comment

                You are indirectly addressing Question #4 on the required Form 8867.

                You STILL have to deal with Question #5 and, to a lesser degree, Questions #2 and #6 and #7 on the Form 8867.

                FE

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