Form 8867 Line 5 Is Not for Your Due Diligence Notes — Here’s What You Must Know

Gwennetta Wright
5 days ago
2 min read

By Dr. Gwennetta Wright, Tax Coach

IRS Form 8867, Paid Preparer’s Due Diligence Checklist, showing requirements for documenting eligibility for EITC, CTC, AOTC, and Head of Household filing status, with Xpert Business & Tax Solutions branding overlaid.

Tax Pros, repeat after me: Form 8867 line 5 is not where your due diligence notes go.

This is one of the most common mistakes I see during IRS examinations and it is costing tax professionals money.

Let’s break it down.

Line 5 of Form 8867 clearly states that you are to list the documents you relied on to determine your client’s eligibility for credits like EITC, CTC, AOTC, or Head of Household. Line 5 is about record retention-not interview questions, not follow-up inquiries, and definitely not your due diligence notes.

So when I see tax professionals dropping interview notes and qualifying questions into Line 5 because their software allows it, I already know someone is teaching this wrong. And in many cases, that someone has either never been through an IRS exam or they were fined because their notes were incomplete or misplaced.

Business professional working on a laptop at a modern office desk, smiling while reviewing work, with Xpert Business & Tax Solutions branding visible in the background.

Your questions, your answers, and your notes fall under the knowledge requirement, which is referenced on Line 3 of the form—not Line 5. These are separate due diligence requirements, and confusing the two can put your entire practice at risk.

Yes, software companies include areas to help you stay compliant, but they are tech companies, not the IRS. Just because a box is there does not mean it is being used correctly for audit protection.

This misunderstanding is getting tax pros fined.

Slow down. Read every line of Form 8867. Understand what the IRS is actually asking—and why.

Due diligence is more than compliance. It is protection for your business.

✅ Follow me @gwennettawright on Facebook, Instagram, and TikTok

✅ Visit www.xpertbusinesssolution.com for tools and training