IRS tightens compliance rules for Claiming Earned Income Tax Credit on 2011 Tax Returns.
The IRS has reminded "preparers of tax returns claiming the earned income tax credit in 2011 Tax Returns, the due diligence checklist has to be submitted with the filed return."
Prior to this, tax preparers had to complete Form 8867 or a similar due diligence checklist and retain it in their files to show they verified that the taxpayer was eligible for the credit.
Under the new IRS Tax Regulations, "the 8867 or the checklist must be filed with the return. If your clients make the decision to send in their return themselves, the 8867 or checklist must be attached."
Clearly, this is intended to reduce Fraudulent Returns and hold tax preparers responsible for fraudulent Earned Income Tax Credits claimed on tax returns.