Earned Income Credit Due Diligence Records Practice Question
Work the complete fact pattern before revealing the explanation. This question is adapted from the IRS public sample set for the current exam law period.
To meet due diligence requirements for the Earned Income Credit Worksheet and Form 8867, which statement is true?
- A
A record must be kept of how, when, and from whom the information used to prepare the form and worksheets was obtained
Correct answer - B
Form 8867 need not be filed when all information was provided in writing
- C
Only questions asked by the taxpayer need to be retained
- D
Copies of documents relied upon never need to be retained
A record must be kept of how, when, and from whom the information used to prepare the form and worksheets was obtained
The preparer must retain a record of how, when, and from whom the information used for the due diligence forms and worksheets was obtained.
Transfer the reasoning, not the wording.
Restate the tested rule without the answer choices. Then change one decisive fact and explain which option would need to change. That short exercise makes the explanation retrievable instead of merely familiar.
Official sample source
PassFast adapted this public IRS sample for web practice and added the concise explanation above.