The IRS is sending Letter 5025-H to preparers who completed returns claiming the Earned Income Tax Credit for taxpayers reporting income they received as household employees but didn’t include a W-2 to substantiate the income.
These preparers may not have met their EITC due diligence requirements, according to the IRS.
The letters are part of the agency’s “tiered” outreach and educational efforts to specific preparers. “We look at the number of returns with a high likelihood of EITC errors completed by the same preparer,” reads the IRS EITC page on “Reaching Out to Preparers.”
“We send letters to preparers who have a high number of these returns,” the site continues, adding that the letters state that the IRS believes the preparer completed inaccurate EITC claims and highlight the consequences of preparing inaccurate EITC claims.
The letters also outline EITC due diligence responsibilities; provide tips on preparing accurate returns and point to online EITC tools, information and other resources; and “inform the preparer that we are monitoring their future returns.”
The IRS celebrated EITC Awareness Day, promoting the credit to eligible taxpayers, on Friday.
Jeff Stimpson is a veteran freelance journalist who previously served as editor of The Practical Accountant.