Key Facts about EITC Due Diligence Visits |
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The EITC Due Diligence visit is an examination to determine whether you, as a paid preparer, are in compliance with IRC §6695(g).
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The visits start October 30, 2007.
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If you are selected for a visit, the examiner will notify you by phone or letter.
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Be prepared to schedule an appointment within 15 days of the notification.
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If you are an employee of a tax preparation firm, your employer will also be contacted and interviewed.
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The examiner will review your compliance with all four due diligence requirements.
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General examination guidelines apply to these visits.
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If the examiner determines you have not met the requirements, he or she will propose penalties at the rate of 100 dollars for each return not meeting the requirements.
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If penalties are proposed:
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You may request an informal managerial hearing to discuss the issues;
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You may choose to disagree with the penalties;
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You may file a timely protest to request an Appeals hearing before penalties are assessed;
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You may file Form 6118, Claim for Refund of Income Tax Return Preparer Penalties, after penalties are assessed and within 3 years from the date you pay the penalties.
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More than 90 percent of the IRC §6695(g) penalties are proposed for failure to comply with the "knowledge" requirement.
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Page Last Reviewed or Updated: February 11, 2008