The Earned Income Credit (EIC) is a refundable tax credit that has a significant impact on United States revenue and, in the 2020 tax year, amounted to about $60 billion claimed by more than 25 million tax filers. In a recent year, 153.8 million individual federal tax returns were filed, and 19.6 million12.7% of individual taxpayers claimed the Earned Income Credit. Based on that percentage, it would not be unexpected that any tax return preparer will prepare the tax returns for many EIC claimants.

Learning Objectives

Upon completion of this course, you should be able to:

• Apply the earned income credit rules to determine if a taxpayer is eligible for the tax credit
• Identify the common errors committed in connection with the earned income credit
• Describe the consequences of the IRS disallowance of the earned income credit
• Recognize the tax return preparers EIC due diligence requirements