FORM 8867

[singh]

On the Form 8867 (due Diligence) Part V   Q. 14  "Have you determined that the tax payer was unmarried or considered unmarried............." 

How would I (tax preparer) determine whether my client is unmarried? I can only ask if he/she is unmarried. Do I HAVE A proof that client is unmarried? No. 

So if I am wrong I could pay $500.00 fine.

I would be more comfortable if the question was " Did you ask the tax payer if he/she was single/unmarried.

Any thoughts?

[rbynaker · Accepted solution]

It's much more than that.  #14 covers everything HOH so you need basically a flow chart of Q&A.  Unmarried could mean never married, divorced, widowed or the client could still be married but fall under the "considered unmarried" rules for HOH.  Then you move on to "keeping up a home" and "qualifying person" which involves a myriad of other questions.  If the answers to their questions seem incorrect, incomplete or inconsistent there may be follow-up questions or document requests.  Every situation is different, and every preparer has a different level of risk tolerance for their $545 wager.  Do I need a copy of the divorce decree?  Not necessarily.  But if the 3 prior year returns show MFJ and now they're trying to file HOH, I'm probably going to ask for it.  It certainly meets the definition of inconsistent.  Maybe there's alimony.  Maybe there's one of the "every other year" dependent clauses and we need to release an exemption.  We don't know unless we ask.  One of the biggest challenges in due diligence is knowing what to ask in what situations.

[Ephesians3-14]

New Policy effective immediately...I just won't prepare HOH returns! LOL

Problem solved.

[rbynaker]

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@Ephesians3-14 wrote:

New Policy effective immediately...I just won't prepare HOH returns! LOL

Problem solved.

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I already adopted that policy the year they added HOH to the DueDoo list.

CTC is too prevalent to avoid but I stick to nuclear families.  The most complicated situation I deal with is when a client moved Grandma in and I had to 'splain the "who gets to claim" rules.

[singh]

Thank you, rbynaker, for the detailed explanation.