Documentation for form 8867

Hi guys,

First of all, I know I ask a lot of novice questions and I appreciate you all and your knowledge. I'm a very new CPA.

I can't tell you how many people say that I am the first CPA who has refused to file a tax return without a document for the 8867. Am I crazy?

It doesn't say, "Did you feel a document was necessary?" or "Did you get a document?" or "Did the taxpayer feel like providing a document?".. it literally says, "What documents did you rely on?"

Am I correct that unless I have personal family knowledge of dependency, then they absolutely must provide a document, right? And every client feels like I know them and they're a close personal friend... Ok.. but realistically, I don't have 500 close personal friends.

No, you're not lazy. You need to do your due diligence and that's what I tell my clients. Even the son of hubby's childhood friends and his long-term girlfriend and their three kids. Each year I call them and do the same interview. Once they've provided me with h at least one document then I will continue to use it but my phone interview verifies everything.

We can rely on a client's representations unless we have knowledge to the contrary or the representations are contradictory. What documentation are you requesting?

I've incorporated CTC due diligence questions into my 1040 organizer to streamline the CTC due diligence process. List those documents provided by the taxpayer, if any, that you relied on: "Signed client organizer"

No, you're not lazy. You need to do your due diligence and that's what I tell my clients. Even the son of hubby's childhood friends and his long-term girlfriend and their three kids. Each year I call them and do the same interview. Once they've provided me with h at least one document then I will continue to use it but my phone interview verifies everything.

Phew! I'm not crazy!

We can rely on a client's representations unless we have knowledge to the contrary or the representations are contradictory. What documentation are you requesting?

I've incorporated CTC due diligence questions into my 1040 organizer to streamline the CTC due diligence process. List those documents provided by the taxpayer, if any, that you relied on: "Signed client organizer"

I ask for a 1095-B or C .. or a report card, tuition statement or anything that went through the post office with the kids name and your address.

We can rely on a client's representations unless we have knowledge to the contrary or the representations are contradictory. What documentation are you requesting?

I've incorporated CTC due diligence questions into my 1040 organizer to streamline the CTC due diligence process. List those documents provided by the taxpayer, if any, that you relied on: "Signed client organizer"

I ask for a 1095-B or C .. or a report card, tuition statement or anything that went through the post office with the kids name and your address.

MANY MANY years ago… when i needed clients and had a lot of new clients that I didn’t know, i learned pretty fast that 5 percent of them lie to you. I think you’re doing the right thing and many clients may not come back but you dont want them back.

I have a questionnaire that asks all of the questions they complete and sign. Then the first time I do the return I get birth certificates or adoption information and keep it in the perm file

Agree with above posts.

Also allow me to add that seeking a different demographic altogether, in general ,will have a massive impact on the next 10 years of your earnings.

I have learned this the hard way.

We can rely on a client's representations unless we have knowledge to the contrary or the representations are contradictory. What documentation are you requesting?

I've incorporated CTC due diligence questions into my 1040 organizer to streamline the CTC due diligence process. List those documents provided by the taxpayer, if any, that you relied on: "Signed client organizer"

I ask for a 1095-B or C .. or a report card, tuition statement or anything that went through the post office with the kids name and your address.

MANY MANY years ago… when i needed clients and had a lot of new clients that I didn’t know, i learned pretty fast that 5 percent of them lie to you. I think you’re doing the right thing and many clients may not come back but you dont want them back.

Yup! 5% lie.

I actually haven't had an issue getting these docs... they're just surprised that I ask,.. most people are like, "that's a strange request" but they give me what I ask for.

Agree with above posts.

Also allow me to add that seeking a different demographic altogether, in general ,will have a massive impact on the next 10 years of your earnings.

I have learned this the hard way.

Yeah, thank goodness I haven't had an issue. People give me what I ask for. But a small percentage have trouble getting what I need. But it's like.. who the hell has a kid and has nothing with the kids name on it? Frankly, it's almost proof that you're erroneously claiming the child.

Do y’all get documentation each year or is the first year of the engagement sufficient?

I'm not aware of any requirement to "get documentation" under our due diligence requirements. We're required to qualify the client, not ignore what we know, and if we encounter inconsistent information, to clarify that inconsistent information which may include requesting documents. Treasury Reg Sec. 1.6695-2.

IMO, tax preparers shouldn't be requesting non-necessary PII and sensitive information. By doing so, you're just increasing the exposure your clients have should you ever have a data breach.

If one out of 20 clients are lying to you to claim CTCs, IMO you should re-evaluate what demographic you're marketing to.

I completely agree w MvT. Question 6 for example asks if we asked the client if he/she can provide documentation...it does not say we must have the documentation. We are intrusive enough just doing what we must without requiring documentation that we aren't really required to get. I ask the clients to affirmatively state that they meet the requirements. Here is an example copied from a recent list of questions/issues sent to a client

17. Let’s address the due diligence requirements when claiming the child tax credit. Here are the annual questions, so we are able to check the right boxes on the due diligence checklist:

a. Are you able to provide documentation to substantiate that you support the children and that they live with you?

b. Has the IRS disallowed or reduced this credit in previous year?

c. Are the children United States citizens?

d. In order to check the boxes “yes” that I have explained certain concepts to you, I must explain that you may not claim a credit related to the child if the child has not lived with you for over half of the year, even if you supported the child, unless the child’s custodial parent has released a claim to exemption for the child. In addition, there’s a certain form that must be attached in that situation.


In the first year of this question, I always apologize and remind them that I did not create the rules or this form.

I will say, ultra tax wont let you efile unless you put something down as a document.