The Earned Income Credit (EIC) is a refundable tax credit that has a significant impact on United States revenue. It is also the source of a disproportionately large number of errors in tax returns in which a claim for it is made. In a recent year, 150.3 million individual federal tax returns were filed, and more than 27.4 million—18.2% claimed the Earned Income Credit[1]. Based on that percentage, it would not be unexpected that, in the years ahead, approximately one taxpayer in every five will claim the EIC. Approximately 70% of federal income returns claiming the earned income credit are prepared by professional tax return preparers.
This course briefly summarizes the earned income credit rules, examines the common errors committed when claiming the credit, discusses the EIC due diligence requirements imposed on professional tax return preparers, and identifies the sanctions to which preparers and their employers may be subject for a failure to meet expected due diligence requirements.
[1] SOI Tax Stats-Individual Income Tax Returns may be accessed at: http://www.irs.gov/uac/SOI-Tax-Stats-Historical-Table-1.
No advance preparation needed
Program Level – Basic
Program prerequisites – None
Delivery method – QAS self-study
Recommended CPE credits – 2
Recommended field of study – Taxes & Regulatory Ethics
Course Learning Objectives
Upon completion of this course, you should be able to:
- Recognize the earned income credit eligibility rules;
- List the common errors committed in connection with claiming the earned income credit;
- Describe the consequences for the taxpayer of the IRS’ disallowance of the earned income credit;
- Identify the tax return preparer’s earned income credit due diligence requirements; and
- List the sanctions that may be applied on a tax return preparer and his or her employer for a failure to meet due diligence requirements.
Copyright 2024 by Winn Publications ALL RIGHTS RESERVED. NO PART OF THIS COURSE MAY BE REPRODUCED IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE COPYRIGHT HOLDER. All materials relating to this course are copyrighted by Winn Publications. Purchase of a course includes a license for one person to use the course materials. Absent specific written permission from the copyright holder, it is not permissible to distribute files containing course materials or printed versions of course materials to individuals who have not purchased the course. It is also not permissible to make the course materials available to others over a computer network, Intranet, Internet, or any other storage, transmittal, or retrieval system. This document is designed to provide general information and is not a substitute for professional advice in specific situations. It is not intended to be, and should not be construed as, legal or accounting advice which should be provided only by professional advisers. No advance preparation needed Program Level - Basic Program prerequisites - None Delivery method - QAS self-study Recommended CPE credits - 2 Recommended field of study - Regulatory Ethics
