2018 Changes to Form 8867 (Preparer Due Diligence Checklist)
November 9, 2018
This is a reminder that the Tax Cuts and Jobs Act added the Head of Household filing status and the new credit for other dependents to the preparer due diligence requirements.
Therefore the 2018 Form 8867 (Preparer Due Diligence Checklist) has been revised as follows:
- New checkbox for the head of household filing status has been added to Part I (Questions related to all credits and head of household filing status).
- The new credit for other dependents falls under the due diligence requirements for the child tax credit and therefore has been added as part of the child tax credit checkbox on Part I and Part III.
- New Section V has been added which includes a new question for the head of household filing status.
- Part III questions (related to the child tax credit/additional child tax credit/credit for other dependents) have been rewritten in order to clarify what due diligence requirements that must be met for residing in US, living with the child and children of divorced or separated parents.
For more details on what these changes are see the draft of the 2018 Form 8867 and the instructions on the IRS website.
It is also important to note that the Section 6695 penalty amount for failure to comply with the preparer due diligence requirements has been increased to $520 for each of the applicable credits and the head of household filing status for 2018 returns. This could result in a $2,080 penalty per return if all the applicable credits are claimed, the head of household filing status is used and the IRS determines that the preparer did not follow their due diligence requirements.