0926 Publ 4687 (PDF)

Official source: IRS Forms, Instructions & Publications (https://www.irs.gov/pub/irs-pdf/p4687.pdf), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

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Ask all the right questions to get the relevant facts.

If you have a reason to doubt or question any information provided to you or known to

you to determine your client’s eligibility for the credit(s) or HOH filing status or to compute

the amount of the credit(s) you must:

• Ask your client additional questions if a reasonable and well-informed tax

return preparer, knowledgeable in the law, would conclude the information

furnished seems incorrect, inconsistent, or incomplete.

• Not know or have a reason to know the information provided is incorrect,

inconsistent or incomplete.

• Document in your files at the time of the interview the questions you asked

and your client’s answers (see Keep Records below).

Based on the facts, complete the applicable worksheet(s) or your own worksheet(s) to

compute the EITC, CTC/ACTC/ ODC or AOTC claimed on the return or claim for refund.

Most professional tax return preparation software includes the appropriate worksheets.

Complete Form 8867, Paid Preparer’s Due Diligence Checklist, and submit it to the IRS

with every electronic or paper return or claim for refund you prepare claiming the EITC,

CTC/ACTC/ODC, AOTC, or HOH filing status.

• Make sure your software includes Form 8867 and file the completed form with

every electronic return or claim for refund or provide the completed form with

every paper return or claim for refund you prepare that claims the EITC, CTC/

ACTC/ODC, AOTC, or HOH filing status.

• Answer each question on the form based on information from your client and

information you know is true.

• You must also personally complete Part VI, Eligibility Certification.

Keep a record of the following:

• Form 8867 (see Form 8867 above)

• Applicable worksheet(s) (see Credit Computation above)

• A record of how, when, and from whom the information used to prepare Form

8867 and the applicable worksheet(s) was obtained

• Any taxpayer documents provided to you that you relied on to determine

eligibility for the credit(s) or HOH filing status or to compute the amount of

the credit(s). Due diligence rules do not require you to review specific client

documents. However, if any were provided to you and you relied on them,

you must keep copies of them.

The records can be kept in electronic or paper format, and you must produce the records if the IRS requests

them. You should keep a backup of these records in a separate, secure location.

Keep these records for three years from the latest of:

• The date the return is due (without extensions)

• The date the return or claim for refund was electronically filed

• The date the return or claim for refund was presented to your client for sig

nature, if not filed electronically

• The date you submitted to the signing return preparer the part of the return or

claim for which you were responsible, if you are a non-signing return preparer

A firm employing a preparer may be penalized for an employee’s failure to exercise due

diligence if any of the following apply:

• A member of the firm’s principal management participated in or, prior to the

time the return was filed, knew of the failure to comply with the due diligence

requirements.

• The firm failed to establish reasonable and appropriate procedures to ensure

compliance with due diligence requirements.

• The firm disregarded its reasonable and appropriate compliance procedures

in the preparation of the return or claim for refund through willfulness, reck

lessness, or gross indifference. This includes ignoring facts that would lead a

person of reasonable prudence and competence to investigate further.

If you fail to comply with the due diligence requirements, the IRS can assess a $500 pen

alty (adjusted annually for inflation) against you and if applicable, against your employer

for each failure. The IRS can assess up to four penalties for a return or claim for refund

that claims all three credits and HOH filing status.

If the IRS examines your client’s return and it is found to be incorrect, the IRS can assess

accuracy or fraud penalties against your client. The IRS can also ban your client from

claiming the EITC, CTC/ACTC/ODC, or AOTC for 2 or 10 years if the facts and circum

stances indicate reckless or intentional disregard of rules and regulations or fraud.

Examples: knowledge requirement

You must carefully consider and understand all relevant information for each tax benefit

claimed, such as the facts about your client’s income, personal living and household

circumstances and any post-secondary education undertaken. Inquire further if any

information you obtain or know, or have reason to know, seems incorrect, inconsistent,

or incomplete, and document your additional inquiries and the client’s responses.

For each of the following examples, you must make a clear record of whether and what

supporting client documentation was provided and keep a copy of any client document

you relied on, including the identity of any person furnishing the information. Keep a

copy of the completed Form 8867.

A client wants to claim his niece and nephew

for the EITC and CTC.

This information seems incomplete because it is common

for a child to live with at least one parent. You must make

reasonable inquiries to get the facts about your client’s

living circumstances, such as finding out who the chil

dren’s parents are and where they lived, whether anyone

else can claim the children as dependents/qualifying

children and the dates the children lived with your client.

An 18-year-old client earned $8,000 and

states she lived with her parents during part

of the year. She wants to claim her newborn

biological child for the EITC and CTC.

You must ask additional questions to determine whether

your client or her baby is the qualifying child of your

client’s parents. Be sure to review all eligibility tests and

the tie-breaker rules to determine who is eligible to claim

each credit.

A client has two qualifying children and wants

to claim the EITC. She tells you she earned

$20,000 in income from her Schedule C busi

ness and had no business expenses.

This information appears incomplete because it can be

unusual for someone who is self-employed to have no

business expenses. You must ask additional reasonable

questions to determine whether your client is carrying

on a business and whether the information about her

income and expenses is correct.

A 22-year-old client wants to claim two sons,

ages 10 and 11, as qualifying children for the

EITC.

This information appears inconsistent because the chil

dren’s ages are so close to the client’s age. You must

make additional reasonable inquiries about the children’s

relationship to your client.

A client wants to claim the ODC for his three

children. The children all have ITINs and lived

part of the year outside the United States.

Because ITINs are only issued to non-citizens, you must

ask additional questions to determine whether each child

meets the tests to be a resident of the United States.

Two clients indicate they live together with

their 2 minor children. Each client wants to

file as HOH. Based on the information they

provided, are they eligible to claim HOH?

The information appears incomplete or inconsistent as

only one client can pay more than 50% of the household

expenses for the household that they live in together.

You must ask more questions to determine the amount

each client paid towards keeping up the home. You also

must document the client’s responses to the questions

that you ask.

A new client who filed jointly with her spouse

last year states she is no longer married.

For the current tax year, she wants to file

as head of household because her niece

and nephew lived with her part of the year.

The information is incomplete so far. You must inquire

further to get a clear picture of the client’s personal

living circumstances such as who the children’s par

ents are and where they lived, whether anyone else

can claim the children as dependents or as qualifying

persons for HOH, the dates the children lived with your

client, who else may have lived in the same home with

your client and the amount each person paid towards

keeping up the home.

Additional questions to consider:

• Does your client have legal custody of the

niece & nephew and how long did they live

with the client during the year in question?

• Did your client receive financial/govern

mental assistance to support the niece &

nephew?

• When was the divorce was finalized.?

• Was your client responsible for maintaining

the household, and did they provide more

than 50% of that support?

A client is claiming head of household with

a parent as their qualifying person and pro

vided support for the parent.

The information is incomplete so far. You must inquire

further whether the parent can be claimed as a depen

dent or as a qualifying person for HOH.

• Was the parent’s income below the thresh

old to be claimed as a dependent?

• How much support/income did the taxpayer

and the parent provide?

• Is the parent a U.S. citizen, U.S resident

alien, US national, or a resident of Canada

or Mexico?

• Was the parent is living in the home with the

taxpayer or if the taxpayer is supporting the

parent outside the home?

For more information on Head of Household filing

status refer to Publication 501, Dependents, Standard

Deduction, and Filing Information.

Avoid Common Errors

• EITC claimed for a child who is not a qualifying child. Find out whether

the child meets the relationship, age, residency and joint return tests.

Consider tie-breaker rules if a child is the qualifying child of more than

one taxpayer.

• EITC claimed for a child who does not have a valid SSN. An SSN is

valid for the EITC unless it was issued after the due date of the return

(including extensions) or it was issued solely to apply for or receive a

federally funded benefit and does not authorize the holder to work.

• Claiming the EITC when married. Ask questions to find out if your client

is married under state law, including common law. If your married client

does not file a joint return make sure your client meets the additional

rules to claim the EITC.

• Incorrectly reporting income or expenses. Has your client provided

you with all sources and amounts of income? Be alert for questionable

Forms W-2. Ask your self-employed client enough questions to make

sure they have a true business, and if so, that they report all business

income and deduct all allowable expenses.

• CTC or ACTC claimed for a child who does not meet the age require

ment. The child must be under the applicable age limit at the end of the

tax year. There are no exceptions.

• CTC or ACTC claimed for a child who does not have the required SSN.

The SSN must be valid for employment and issued before the due

date of the tax return (including extensions). The only exception is for

a dependent child who was born and died before the end of the year.

• ODC claimed for an individual who does not have a taxpayer identifi

cation number (SSN, ITIN or ATIN) issued on or before the due date of

the tax return (including extensions) unless applying for an ITIN or ATIN.

• CTC, ACTC or ODC claimed for an individual who does not meet the

dependency requirements. The individual must meet all the eligibility

rules for a dependent (unless the special rule for divorced or separated

parents applies) and be claimed as a dependent on your client’s return.

Consider tie-breaker rules if a dependent is the qualifying child of more

than one taxpayer.

• CTC, ACTC or ODC claimed for a non-citizen dependent who does not

meet the residency requirement. A non-citizen individual claimed must

be a U.S. national or resident.

• AOTC claimed for a student for more than four tax years.

• AOTC claimed for attendance after the year the individual completed

four years of post-secondary education.

• Student didn’t attend an eligible educational institution. The AOTC is

for post-secondary education, which may include a college, university

or technical school. To be eligible, a school must be able to participate

in the U.S. Department of Education student aid program.

• Student didn’t pay qualifying educational expenses. Expenses must

be paid or considered paid by your client, your client’s spouse, or a

student claimed as a dependent on the tax return. Only amounts paid

for tuition, required fees and course materials for an academic period

beginning in the tax year or the first three months of the following tax

year are qualified expenses.

• Student was not enrolled at least half-time in a program leading to a

degree or other recognized educational credential. If the student did

not attend at least half time or was not pursuing a degree or other

credential, your client cannot claim the AOTC on behalf of the student.

Consider your client’s eligibility to claim the lifetime learning credit rather

than the AOTC.

• HOH claimed for a client who did not pay more than half the cost of

keeping up a home. Did charities, the government, or others contribute

to the cost of keeping up the home? Only an individual who paid over

half the upkeep costs can claim HOH filing status.

• HOH claimed when your client’s correct filing status is married filing

jointly or separately. Your married client must meet specific eligibility

rules to be considered unmarried for HOH filing status.

• HOH claimed when a qualifying person did not live in your client’s

home for more than half the tax year. Note: There are specific rules for

a dependent parent living in a separate home.

The online Tax Return Preparer Toolkit at EITC.IRS.gov is your resource for information on meeting the

paid preparer due diligence requirements for the EITC, CTC/ACTC/ODC, AOTC, and HOH filing status.

Publication 4687 (Rev. 9-2026) Catalog Number 51636Y Department of the Treasury Internal Revenue Service www.irs.gov