New Due Dilligence on form 8867 for 2012

[taxtrio]

I just looked at the new 8867 for 2012. Now four pages with additional due dilligence questions.

Any comments? Looks like I'm going to use more paper copying "documentation" for EIC clients!

taxtrio

[JohnH]

Makes one question the wisdom of preparing any returns with EIC, unless your practice is geared up for that type of return on a high-volume basis. I've been sending them to HRB or Liberty for several years, with a couple of exceptions that I've known personally for many years.

[mlinderEA]

I do a lot of EITC returns the new 8867 just puts in writing what IRS has wanted for the past two tax seasons.I have had different preparers audited for 2010 and 2011 and they wanted us to document on niece's,nephews,brothers,sisters,and grand children why the parents were not claiming the dependent.This is now integrated into the 8867.

[MN2V]

I have a question abot EIC while the subject is a topic...

I know the cut off age is 65 but I can not find any inf about this situation...

Couple filing MFJ...wife is over 65 and not working, husband is under 65 and has

some income, so jointy do they qualify? thanks...

[jainen]

>>I can not find any inf about this situation<<

Where did you look? A great many questions can be answered by simply studying basic references.

Instructions for Form 1040, "Were you, or your spouse if filing a joint return, at least age 25 but under age 65 at the end of 2011?"

Pub 17, "It does not matter which spouse meets the age test, as long as one of the spouses does."

[jainen]

>>why the parents were not claiming the dependent<<

I don't understand why I have to pry into family relationships that way. It has absolutely no relevance whatsoever as to whether my client is eligible for EIC. How could I even get a reliable answer?

I guess next they'll want me to find out why my client's employer won't reimburse travel expenses so I have to complete Form 2106. Or at least why the college won't give my kid a scholarship to cover tuition so I have to claim refundable AOC..

[kcjenkins]

I don't understand why I have to pry into family relationships that way. It has absolutely no relevance whatsoever as to whether my client is eligible for EIC. How could I even get a reliable answer?

It's because they want you to do part of their job for them, free gratis. And they know that those are the more questionable relationships. Next step will be to expand it to ALL EIC claims, I suppose. Admittedly, there is a lot of EIC fraud, but it should not be our job to control it. Frankly, if they put a few offenders in jail, with a lot of publicity that they are going to crack down on this crime, that would probably cut it in half. Right now, if they do find fraud they still do not put anyone in jail.

[JohnH]

The camel's head keeps coming into the tent...

[jainen]

>>if they do find fraud they still do not put anyone in jail<<

Sure they do--here's a case from your own state, Arkansas http://www.justice.gov/usao/are/news/2012/January/Morrises_IRSVA_sent_012712.html

Oops, sorry. That was the preparer, not the taxpayer!

[kcjenkins]

Exactly. I am glad they put these preparers in jail, but unless they also make some examples of the taxpayers who go along with cheating to get a bigger refund, it will continue to be a popular choice with many taxpayers. Note, too, that the EIC fraud was only a small addendum to the other larger items they were charged with. They actually were charged on something rather different than the wholesale EIC fraud that some big city tax firms are doing, involving hundreds and maybe even thousands of returns.

[taxxcpa]

The only way to end EIC fraud is to end the EIC.

[Margaret CPA in OH]

Alas, how do we end bank fraud, mortgage fraud and investment fraud, among others? Would that some of those folks were jailed with lots of publicity. Without checking details, I think the amounts of money involved with far fewer people were considerable.

I guess so long as we have people who want something for little or nothing no matter how much or little they already have, there will be fraud. I am glad that I don't usually have any EIC clients. The one I had one year was a contractor who fell off the roof mid year in an already bad year. Thankfully he has recovered as has his business for the most part.

[Jack from Ohio]

Anyone interested in my process for EIC documentation, send me a message and I will be glad to share.

I have the information compiled and ready to send. A few have messaged me their e-mail addresses and I have sent the information out.

If you message me your e-mail address, I will send it to anyone who may be interested.

And the easy way to do that is to just click on his pic, them select 'Send private message'

Edited December 7, 2012 by kcjenkins
to add the how-to info

[SCL]

how soon we forget about the 2008/09 $1+ trillion bailout of criminal wall street/investment bank plutocrats...and the subsequent $3 trillion (and counting) inflationary expansion of the money supply to finance the 'too big to fail' extortion.

leave the eic alooonne!

[JohnH]

They are leaving the EIC alone.

They just aren't leaving YOU alone.

They are forcing tax preparers to become their auditors via the penalty provisions.

[SCL]

pffft!

sorry presumptuous breath. i do around 100 mid to higher end returns. last year i did not do one eic.

[kcjenkins]

So what? I do not see how that is relevant? John's point is just as valid.

[JohnH]

"Presumptuous breath" - I like it!

Do I have your permission to use it sometime?

(I'll use it with or without permission, but I think I should at least show care and concern)