Conscientious preparers always want as much as possible about clients’ financial situations, but new mandates regarding tax credit due diligence mean preparers must learn more than ever this season.
“It will definitely add time to our procedures, especially this first year,” said Enrolled Agent Laurie Ziegler at Sass Accounting, in Saukville, Wis. “Since the Earned Income Tax Credit has already required us to do due diligence, we’ll be expanding those practices to the Child Tax Credit and American Opportunity Credit. Fortunately, we’re well-established so we personally know many of our clients. That will greatly reduce the number of returns that need more in-depth due diligence.”
“It’s going to be a difficult and time-consuming task for preparers to educate the taxpayers of these requirements,” said EA Twila Midwood of Advanced Tax Centre in Rockledge, Fla., who sent newsletters to clients in early December “informing them of the new requirements for tax professionals regarding these credits.”
“I’ve also updated my questionnaire to include verbiage on the requirements and dependents’ proof of residency,” Midwood said. “Taking it a step further, I’m training my front office staff to ask clients if they have this information when they drop off their tax documents or come in for an appointment.”
“It will definitely add time to our procedures, especially this first year,” said Enrolled Agent Laurie Ziegler at Sass Accounting, in Saukville, Wis. “Since the Earned Income Tax Credit has already required us to do due diligence, we’ll be expanding those practices to the Child Tax Credit and American Opportunity Credit. Fortunately, we’re well-established so we personally know many of our clients. That will greatly reduce the number of returns that need more in-depth due diligence.”
“It’s going to be a difficult and time-consuming task for preparers to educate the taxpayers of these requirements,” said EA Twila Midwood of Advanced Tax Centre in Rockledge, Fla., who sent newsletters to clients in early December “informing them of the new requirements for tax professionals regarding these credits.”
“I’ve also updated my questionnaire to include verbiage on the requirements and dependents’ proof of residency,” Midwood said. “Taking it a step further, I’m training my front office staff to ask clients if they have this information when they drop off their tax documents or come in for an appointment.”