On the Due Diligence 8867, Question 2 Yes - No - N/A when is N/A acceptable?

[Just-Lisa-Now-]

what situation would the N/A box be checked?

My daughters return with my grandkids on it, I didn't use any checklists, I know their situation personally...do I mark NO or N/A?  

[Terry53029]

You could also check non paid preparer on information worksheet. Then you don't have to fill out 8867

[rbynaker · Accepted solution]

See example 6:

https://www.federalregister.gov/documents/2018/11/07/2018-24411/tax-return-preparer-due-diligence-pe...

The preamble makes it pretty clear that even if you already know, you still have to ask and document the responses.

"The new Example 6 clarifies that a tax return preparer who possesses pre-existing knowledge that was acquired outside the context of the preparer's tax return preparation practice cannot meet the knowledge requirement of paragraph (b)(3)(ii) by relying on that pre-existing knowledge. The tax return preparer must make reasonable inquiries to determine the applicable facts, and the inquiries and responses to those inquiries must be contemporaneously documented in the tax return preparer's files."

Or if no money changes hands, go with Terry's solution.

Rick

[Just-Lisa-Now-]

I went attended an IRS webinar 6 years ago that told us the same thing, I find it tedious, but I'll play along

[IRonMaN]

Sometimes the instructions actually can be helpful 🙂

Line 2

You must complete the applicable IRS worksheet for the EIC, the CTC/ACTC/ODC, and/or the AOTC (or your own worksheet that provides the same information), as well as all required forms and schedules for each credit claimed on the return for which you are the paid tax return preparer. You can find the worksheets for the EIC and the CTC/ACTC/ODC in the instructions for Forms 1040 and 1040NR. The ACTC worksheet can also be found in the instructions for Forms 1040-SS and 1040-PR. You can find the AOTC worksheet in the Instructions for Form 8863. Completion of these forms, schedules, and worksheets assists you in determining the taxpayer’s eligibility for the credit and the correct amount of the credit and is required under the due diligence requirements set forth in Treasury Regulations. If the taxpayer claimed HOH filing status and did not claim any of the credits, check the "N/A" box.

[Just-Lisa-Now-]

so if only the HOH and you can mark N/A  gotcha!

[Just-Lisa-Now-]

But if I mark NO, that will probably flag me with IRS, I guess I have to mark YES

[Ernie]

When all you have is HOH?

[Just-Lisa-Now-]

Shes got HOH, ACTC and EIC