Good afternoon, you’ve reached the Internal Revenue Service. My name is Agent Sánchez and my ID number is 54-67823. How can I help you today?
My name is Brittney Shoemaker and I received this IRS Letter 6222 asking me to call about a due diligence examination for my tax practice. Can you explain why?
Yes, Ms. Shoemaker. As a paid tax preparer, you must meet those due diligence requirements whenever you prepare returns claiming the Earned Income Tax or Child Tax Credit, the American Opportunity Tax Credit and Head of Household filing status. The IRS letter you received means you’ve been selected for a due diligence examination.
Oh no! Are you kidding me, how does this whole thing work?
Well yeah…ok, so during this examination, I going to look at 25 of your clients’ files...the Form 4564, Information Document Request, lists the documentation that you need to provide us in order to support the benefits claimed on the return. I will then review your due diligence records, and these will include written questions you asked your client and their answers, worksheets, questionnaires, and copies of any documents provided by your client to determine eligibility for the various tax benefits claimed.
Ok, so why did you choose me? Are these IRS due diligence exams randomly selected?
Well, the IRS does these examinations to ensure paid preparers are correctly following due diligence requirements and filing correct returns for their clients. I’m not examining any client returns; I am, however, examining your compliance with section 6695(g), Due Diligence.
Alright, so what do I need to do next?
So the first step will be for you, to submit to me the information on the 25 clients I requested. You can send that information by mail or electronically. After that, I’ll need a few days on my end to review the documents. We’ll have a phone interview for me to ask questions about your clients and the process you followed for due diligence.
Alright, so I should be able to get those client records in the mail probably within 3 days. As far as the interview, let me check my calendar. Is two weeks from Wednesday at 9 a.m. good for you?
Yes, that date and time work for me. What I’ll do is follow up with a letter, confirming the phone appointment. The letter will also outline the information you will need for our call, and if you have any questions or concerns before then, please feel free to give me a call.
Sounds good. Thank you so much.