Offices preparing returns that have had the Earned Income Tax Credit denied will be receiving compliance letters stressing the importance of operating with Due Dilligance in the future.  Earned Income Tax Credit is one of the most fradulently used tools in individual tax preparation.  As a preparer you should be aware of the EITC due diligence requiremetns as well as related tax laws and regulations.  Preparer penalties for failing to meet the due diligence requirements for preparing EITC tax returns range from monetary disciplinary notification, monetary penalties, criminal investigation, and Suspension or expulsion of the preparers firm from participating in IRS e-file. For information on common errors on EITC returns visit the IRS’ website at: http://www.eitc.irs.gov/rptoolkit/toolsandtips/mostcommonerrors/

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