Table of Contents
Course Learning Objectives
Introduction to The Course
Chapter 1 – Earned Income Credit Rules
Learning Objectives
Introduction
Eligibility to Receive EIC
EIC Rules Applicable to Everyone
Adjusted Gross Income Limits
Valid Social Security Number Required
Tax Filing Status
Citizenship or Residency
Foreign Earned Income
Investment Income
Earned Income
EIC Rules That Apply Only if the Taxpayer Has a Qualifying Child
Relationship, Age, Residence and Joint Return Tests
The Relationship Test
The Age Test
Student Defined
Permanently and Totally Disabled Defined
The Residency Test
Exception for U.S. Military Stationed Outside the U.S.
The Joint Return Test
Child Must Have Valid Social Security Number
Qualifying Child of More than One Person Rule
Tiebreaker Rules
Qualifying Child of Another Taxpayer Rule
EIC Rules That Apply if Taxpayer Does Not Have a Qualifying Child
The Age Rule
Death of Spouse During Year
The Dependent of Another Person Rule
The Qualifying Child of Another Taxpayer Rule
The Main Home Rule
Figuring the Amount of the Earned Income Credit
Calculating Earned Income for EIC Purposes
Taxpayers Not Self-Employed, Statutory Employees, Clergy or Church Employees
Self-Employed Taxpayers, Statutory Employees, Clergy and Church Employees
Summary
Chapter 1 Review Questions
Chapter 2 – Earned Income Credit Errors
Learning Objectives
Introduction
Incidence of Earned Income Credit Errors
Factors Leading to Earned Income Credit Errors
Estimated Revenue Impact of Earned Income Credit Errors
Common Earned Income Credit Errors
Earned Income Credit Errors Involving Qualifying Children
Qualifying Child Requirements
When a Child is Disabled
Avoiding Qualifying Child Earned Income Credit Errors
Earned Income Credit Errors Involving a Client’s Filing Status
Single Filing Status
Head of Household Filing Status
Married Persons Living Apart
Avoiding Filing Status Earned Income Credit Errors
Earned Income Credit Errors Involving Income Reporting
Avoiding Income Reporting Earned Income Credit Errors
Earned Income Credit Errors Involving Social Security Numbers
Avoiding Social Security Number Earned Income Credit Errors
Summary
Chapter 2 Review Questions
Chapter 3 - EIC Disallowance
Learning Objectives
Introduction
IRS Efforts to Reduce Improper EIC Payments
Claiming EIC after Disallowance
IRS Form 8862 Timing
Filing IRS Form 8862
Exceptions
Client Consequences of EIC Disallowance
Disallowance Due to Reckless or Intentional Disregard of EIC Rules
Disallowance Due to Fraud
Summary
Chapter 3 Review Questions
Chapter 4 - EIC Due Diligence
Learning Objectives
Introduction
Tax Preparer Due Diligence a Statutory Requirement – IRC §6695
Due Diligence Requirements
Eligibility Checklist – IRS Form 8867
Due Diligence Questions to Ask to Avoid Qualifying Child Errors
Eligibility Checklist Best Practices
EIC Computation
Computation Best Practices
Know the Law and the Client
When Should a Preparer Ask Additional Questions – Examples
Knowledge Requirement Best Practices
Record Maintenance
Record Maintenance Best Practices
Failure to Meet Due Diligence Requirements
Consequences for the Tax Return Preparer
Consequences for the Preparer’s Employer
Summary
Chapter 4 Review Questions
Answers to Chapter Review Questions
Chapter 1 Review Questions Feedback
Chapter 2 Review Questions Feedback
Chapter 3 Review Questions Feedback
Chapter 4 Review Questions Feedback
Appendix A – Worksheet A
Appendix B – Worksheet B
Glossary
Exam Score Sheet…………………………………………………………………………………………………....62
CPE Exam
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