Due Diligence Mastery – EIC, CTC/ACTC/ODC, AOTC, and Head of Household.

Course Classification:

• Category: Advanced Federal Tax (T).

• Credits: 3 IRS Continuing Education Hours.

• Provider: EZ Tax To Go LLC (Provider Number GFLRH).

Summary Description:

Protect your professional practice and avoid costly penalties by mastering Due Diligence. Failures in this area are one of the leading causes of IRS sanctions for tax return preparers. This advanced course delves into the technical mechanics, documentation standards, and the most common audit failure points related to refundable credits and Head of Household filing status. Learn how to build a defensible file and implement firm-level systems to ensure compliance.

What will you learn in this course?

• The Four Due Diligence Requirements: Rigorously apply the completion, knowledge, computation, and record retention requirements under Treasury Regulation Section 1.6695-2.

• The “Reason to Know” Standard: Distinguish between basic inquiry and solid verification. Learn to identify “red flags” and formulate effective interview questions to prevent fraud and common errors.

• Specific Due Diligence by Credit/Status:

  • EIC: Apply heightened scrutiny to self-employed taxpayers reporting Schedule C income to maximize the credit.

  • CTC/ACTC/ODC: Navigate complex situations involving divorced or separated parents and properly apply the qualifying child tiebreaker rules.

  • AOTC: Verify substantiation (Form 1098-T) and apply the four-year and “once-in-a-lifetime” limits.

  • Head of Household (HOH): Correctly evaluate the “more than half the cost” of keeping up a home test.

• Handling Critical Forms and Consequences: Understand the proper use of Form 8867 and when recertification with Form 8862 is required. Grasp the preparer penalties under Section 6695(g) and the ban periods (2 to 10 years) for taxpayers under Section 32(k).

• Firm-Level Responsibility: Distinguish between an individual preparer’s defense (“isolated and inadvertent”) and the firm’s independent liability for a lack of compliance procedures.

Enroll today to achieve advanced technical mastery in due diligence, bulletproof your clients’ returns, and protect the future of your firm against IRS scrutiny!