In the context of tax preparation, the minimum amount of time that Maria is required to retain the signed waivers for the conflict of interest is 36 months from the conclusion of service. This aligns with generally accepted practices for record retention in the tax preparation industry.
Tyler and Tabatha were married. Maria has been their tax preparer for many years. During a meeting with Maria, they disclosed they recently divorced. Maria explained to both of them that a conflict of interest has arisen in their case. They decided to waive the conflict, and both signed separate waivers to continue with Maria as their tax preparer. What is the minimum amount of time that Maria is required to retain the waivers?
36 days from the conclusion of service.
36 months from the conclusion of service.
36 weeks from the conclusion of service.
Four years from the conclusion of service.
7 answers
When is a tax preparer required to complete and submit Form 8867, Paid Preparer's Due Diligence Checklist?
Only with amended returns that claim the Earned Income Credit (EIC), American Opportunity Tax Credit (AOTC), Child Tax Credit (CTC)/Additional Child Tax Credit (ACTC)/Other Dependent Credit (ODC), and head of household (HOH) filing status.
Only with original returns that claim the EIC, AOTC, CTC/ACTC/ODC, and the HOH filing status. This excludes amended returns.
Only if the taxpayer's information provided appears to be incorrect, inconsistent, and incomplete.
With every original and amended return that claims the EIC, AOTC, CTC/ACTC/ODC, and the HOH filing status.
Only with amended returns that claim the Earned Income Credit (EIC), American Opportunity Tax Credit (AOTC), Child Tax Credit (CTC)/Additional Child Tax Credit (ACTC)/Other Dependent Credit (ODC), and head of household (HOH) filing status.
Only with original returns that claim the EIC, AOTC, CTC/ACTC/ODC, and the HOH filing status. This excludes amended returns.
Only if the taxpayer's information provided appears to be incorrect, inconsistent, and incomplete.
With every original and amended return that claims the EIC, AOTC, CTC/ACTC/ODC, and the HOH filing status.
A tax preparer is required to complete and submit Form 8867, Paid Preparer's Due Diligence Checklist, only with original returns that claim the Earned Income Credit (EIC), American Opportunity Tax Credit (AOTC), Child Tax Credit (CTC)/Additional Child Tax Credit (ACTC)/Other Dependent Credit (ODC), and the head of household (HOH) filing status. This excludes amended returns.
For a return filed in 2024, what is the maximum penalty the IRS can assess against a paid tax return preparer who fails to satisfy the due diligence requirements when preparing a return for an individual claiming the following tax benefits?
Earned Income Credit.
Child Tax Credit/Additional Child Tax Credit/Other Dependent Credit.
American Opportunity Tax Credit.
Head of household filing status.
$600 per return.
$2,240 per return.
$2,400 per return.
$3,600 per return.
Earned Income Credit.
Child Tax Credit/Additional Child Tax Credit/Other Dependent Credit.
American Opportunity Tax Credit.
Head of household filing status.
$600 per return.
$2,240 per return.
$2,400 per return.
$3,600 per return.
For a return filed in 2024, the maximum penalty the IRS can assess against a paid tax return preparer who fails to satisfy the due diligence requirements when preparing a return for an individual claiming the Earned Income Credit, Child Tax Credit/Additional Child Tax Credit/Other Dependent Credit, American Opportunity Tax Credit, and Head of Household filing status is $2,400 per return.
Kyle and Cherie were divorced in 2020. The divorce decree granted them joint custody of their son, Bryce.
Bryce, now age 15, lived with Cherie until June 20. On June 21, Bryce went to stay with Kyle and lived there the remainder of the year. Bryce did not provide more than half of his own support.
Bryce stayed with Cherie 171 nights and with Kyle 194 nights during the year. Which statement is correct?
Cherie is entitled to claim Bryce as a qualifying child dependent.
Kyle is entitled to claim Bryce as a qualifying child dependent.
Kyle and Cherie must split all dependency benefits for Bryce.
Neither Kyle nor Cherie are entitled to claim Bryce as a qualifying child dependent.
Bryce, now age 15, lived with Cherie until June 20. On June 21, Bryce went to stay with Kyle and lived there the remainder of the year. Bryce did not provide more than half of his own support.
Bryce stayed with Cherie 171 nights and with Kyle 194 nights during the year. Which statement is correct?
Cherie is entitled to claim Bryce as a qualifying child dependent.
Kyle is entitled to claim Bryce as a qualifying child dependent.
Kyle and Cherie must split all dependency benefits for Bryce.
Neither Kyle nor Cherie are entitled to claim Bryce as a qualifying child dependent.
In this scenario, since Bryce lived with Cherie for 171 nights and with Kyle for 194 nights, Kyle had him for more than half the year. Although they have joint custody, the IRS rules state that the parent with whom the child resides for the greater portion of the year has the right to claim him as a qualifying child dependent.
Therefore, the correct statement is:
Kyle is entitled to claim Bryce as a qualifying child dependent.
1 answer