Reasons tax preparers may be contacted by the IRS

The IRS uses letters and phone calls to help paid tax preparers follow due diligence rules and file accurate returns when claiming these tax benefits:

• Earned income tax credit (EITC),
• Child tax credit (CTC), additional child tax credit, (ACTC), credit for other dependents (ODC),
• American opportunity tax credit (AOTC) and
• Head of household (HOH) filing status.

Why preparers are contacted

• Preparers may receive letters if the returns they file contain errors or if they do not include Form 8867, Paid Preparer's Due Diligence Checklist PDF.
• Each failure may result in a penalty of $650 up to $2,600 per return.
• The IRS may review future returns and may audit the preparer or their clients.

Client letters

• Clients may also get letters if their return looks incorrect.

Phone calls

• If errors continue, the IRS may call preparers. These calls review the due diligence rules but don't ask about specific clients.

Common letters sent

Before tax season

• Letter 5025-F PDF Warns preparers about inaccurate returns and risk of penalties.
• Letter 6138 PDF Alerts clients a return may have errors and how to correct them.
• Letter 5138 PDF Notifies preparer that client returns are being audited.
• Letter 6595 PDF Tells preparer to expect a call from the IRS.
• Letter 6597 PDF Invites preparer to a webinar instead of a visit.

During tax season

• Letter 4858 PDF Reminds preparers of possible due diligence issues this year.
• Letter 5364 PDF Sent when Form 8867 was missing from mailed-in returns.

What should I do if I received an educational letter or telephone call?

If you receive a letter from us, don’t ignore it. Review your return preparation procedures to make sure you consistently meet all four due diligence requirements. Consequences of not meeting your due diligence requirements and continued issues could lead to an in-person visit or audit.

If there is no improvement in the accuracy of returns you prepare, we may follow up with an in-person educational visit or due diligence compliance audit.

The tax return preparer toolkit can help you avoid errors

The toolkit provides education and resources to help paid preparers strengthen due diligence practices and avoid errors.

• Preparer compliance - Focused and tiered
• Take the online Due diligence training module, to help you refresh your tax law and due diligence knowledge. This may qualify you for continuing education credit.
• Meet your due diligence requirements while preparing returns with self-employment income using our Schedule C and record reconstruction training.
• View the popular Due diligence videos to help you improve your due diligence interview process.
• Attend our due diligence webinars or the annual Nationwide Tax Forums.