To: Junior Associate
From: Senior Partner
Date: March 30, 2017
Re: Earned Income Credit
The tax filing season is rapidly approaching. I have been hearing the Congress and the IRS are increasingly concerned with fraudulent claims for earned income credit by taxpayers who do not really qualify and even by identity thieves filing completely phony returns in order to get the refunds. As professional return preparers, do we have some special duty to check the validity of a claim for earned income credit on a return we prepare? If so, what steps do we need to take? Are there any special documents we need to review or complete and retain? Is there any recent guidance on the subject? What, if any, penalties would we face related to filing returns claiming the earned income credit?
Please send me a short memo, citing all relevant authorities. Be thorough, because I may need you to provide training for our staff if the government is imposing any kind of sanctions on preparers.
Please submit a memo which includes facts, issue, analysis, conclusion. In your memo, be sure to cite statutes, regulations, cases and other authorities in the proper manner, as shown in the text. Do not include internet links in the memo, as they may change over time and links to password-protected sites are particularly useless. Grammar and spelling count.