H&R Block Income Tax Course
questions and answers
Adjusted Basis✔✔The Cost or other original basis of property reduced by adjustments such
as depreciation allowed or allowable & increased by Capital Improvements & other
adjustments.
Earned Income Credit Due Diligence four requirements✔✔1) Complete & submit an
eligibility checklist
2) Compute the amount of credit
3) Comply with the knowledge requirement
4) Retain records
EIC due diligence failure✔✔Subject to a $500 penalty for each occurrence
Form 8867✔✔- Paid Preparer's EIC Checklist
- Must be based on info provided by taxpayer to Tax Professional
- Must ask every taxpayer ever question on this list every time.
Tax Professional knowledge requirement✔✔Tax Preparers are responsible for knowing the
tax law and using that knowledge to ensure that the correct questions are asked to get all
the relevant facts as they apply to each EIC return.
Does this make sense?✔✔- Tax Professional must not know or have reason to know that
any information used by the Tax Professional in determining the taxpayer's eligibility for, or
the amount of, the EIC is incorrect.
- Tax Professional must make reasonable inquires and the client's answers at the time of
the interview.
To comply with EIC - Records Retention Requirement:✔✔MUST:
- Retain Form 8867 and EIC worksheet or equivalents & maintain a record of how & when
the info used to complete these forms was obtained.
questions and answers
Adjusted Basis✔✔The Cost or other original basis of property reduced by adjustments such
as depreciation allowed or allowable & increased by Capital Improvements & other
adjustments.
Earned Income Credit Due Diligence four requirements✔✔1) Complete & submit an
eligibility checklist
2) Compute the amount of credit
3) Comply with the knowledge requirement
4) Retain records
EIC due diligence failure✔✔Subject to a $500 penalty for each occurrence
Form 8867✔✔- Paid Preparer's EIC Checklist
- Must be based on info provided by taxpayer to Tax Professional
- Must ask every taxpayer ever question on this list every time.
Tax Professional knowledge requirement✔✔Tax Preparers are responsible for knowing the
tax law and using that knowledge to ensure that the correct questions are asked to get all
the relevant facts as they apply to each EIC return.
Does this make sense?✔✔- Tax Professional must not know or have reason to know that
any information used by the Tax Professional in determining the taxpayer's eligibility for, or
the amount of, the EIC is incorrect.
- Tax Professional must make reasonable inquires and the client's answers at the time of
the interview.
To comply with EIC - Records Retention Requirement:✔✔MUST:
- Retain Form 8867 and EIC worksheet or equivalents & maintain a record of how & when
the info used to complete these forms was obtained.
