All tax preparers must practice due diligence, especially when it comes to the EITC, or they could be fined $500. Their clients could be fined as well.

EITC eligibility is complicated. An updated version of Form 8867, the paid preparer’s checklist, is worth reviewing in every situation. If tax preparers complete and submit the form with each tax return, that counts as due diligence. The law requires that tax preparers make a copy of all documentation supporting EITC eligibility.

Keep your finances and reputation intact by doing your homework when it comes to taxes – and ensure that your tax preparer does the same!