Somebody asked a question yesterday on another board I belong to relative to the new due diligence rules for HOH, especially, but they also affect the CTC, EITC and AOTC. Discussing how others were going to change their practices or not, and whether the government is right in their attempts to make tax preparers the tax police created an interesting dialogue.
Someone made the comment that an RA told her that IRS has a new program called the Due Diligence Program, but I googled that and didn't find anything about such a program. I did find an interesting article reporting on the tax year 2016 and at the end of it there is a discussion of IRS identifying 41 tax preparers who had filed questionable returns as it related to due diligence and what the response had been. Of all the tax preparers in this country, if IRS could only find 41 worthy of commenting on, it sounds like a tempest in a teaspoon, not even a teapot and certainly not worth the effort of creating a whole program because of it. That part just seemed to be a fear tactic.
All in all my sense is that the issues of the government, due diligence and penalties have gotten out of hand and continue to put tax preparers more and more behind the Eight Ball for doing their jobs. Does Circular 230 offer some protection to us when it tells us we can rely on what we are told by a client?