Individual Income Tax Credits & Due Diligence Requirements

Individual Income Tax Credits & Due Diligence Requirements examines the income tax credits available to individual taxpayers. It looks at both the refundable and nonrefundable credits and discusses the nature of the credits, their eligibility requirements, timing, limitations, phase-outs (where appropriate), whether the credit may be carried over, the nature of any qualified expenses, and how they are calculated. 

It considers the Additional Child Tax Credit, the Adoption Credit, the  American Opportunity Tax Credit, the Child and Dependent Care Credit, the Child Tax Credit, the Credit for Other Dependents, the Earned Income Tax Credit, the Electric Vehicle Tax Credit, the Energy Efficient Home Improvement Tax Credit, the Federal Fuel Tax Credit, the Health Insurance Premium Tax Credit, the Lifetime Learning Credit, the Mortgage Interest Credit, the Residential Clean Energy Tax Credit, and the Retirement Savings Contribution Credit. The final chapter focuses on the due diligence requirements applicable to tax preparers and examines the basic principles of due diligence, the most common errors encountered with respect to the refundable credits, how to prepare and submit IRS Form 8867, Paid Preparer’s Due Diligence Checklist, and the requirement to keep appropriate records

Upon completion, the student should be able to:

• Recognize the four basic principles of due diligence;
• Identify the most common due diligence errors seen by the IRS;
• Describe how to address incomplete, inaccurate and inconsistent client claims;
• Explain the penalties that may be levied on taxpayers for reckless and fraudulent claims; and
• List the tax preparer sanctions that may be applied for a failure to be diligent, including the IRS Education and Compliance actions.

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