Looking for a Form 8867 Templates? Download it for free!

postsecondary educational institution eligible to participate in a

Document Retention

student aid program run by the U.S. Department of Education. This

term includes most, but not all, domestic accredited public, nonprofit

To meet the due diligence requirements for the EIC, the CTC/ACTC,

and privately owned for-profit postsecondary institutions as well as

and the AOTC, you must keep all of the following records.

some foreign institutions. Eligibility information should be available

1. A copy of Form 8867;

from the school. A link to the list of most eligible educational

institutions is available at IRS.gov/EEI.

2. The applicable worksheet(s) or your own worksheet(s) for

any credits that are claimed that are specified in

Due Diligence

Tuition Statement (Form 1098-T). Unless an exception to

Requirements, earlier;

reporting applies, an individual enrolled in an eligible educational

institution, whether domestic or foreign, must receive a Form 1098-T

3. Copies of any documents provided by the taxpayer on which

from the institution to claim the AOTC. The exceptions, for which an

you relied to determine eligibility for, and the amount of, the credit(s);

eligible educational institution is not required to provide a Form

4. A record of how, when, and from whom the information used

1098-T, include: (1) nonresident aliens, unless the individual

to prepare Form 8867 and the worksheet(s) was obtained; and

requests that the institution provide a Form 1098-T; (2) students

5. A record of any additional questions you may have asked to

enrolled only in noncredit courses; (3) students whose qualified

determine eligibility for, and the amount of, the credit(s), and the

tuition and related expenses are paid entirely with scholarships; and

taxpayer’s answers.

(4) students whose qualified tuition and related expenses are paid

by a third party under a formal billing arrangement.

You must keep those records for three years from the latest of

the following dates.

If an exception for receiving a Form 1098-T applies, and your

The due date of the tax return (not including extensions).

client otherwise qualifies to claim the AOTC, you must first verify that

The date the return was filed (if you are a signing tax return

the individual was enrolled at an eligible educational institution by

preparer electronically filing the return).

reviewing school transcripts, or other documents made available to

The date the return was presented to the taxpayer for signature (if

you by your client or the school. Second, you must verify the amount

you are a signing tax return preparer not electronically filing the

of tuition and qualified expenses paid by or on behalf of the

return).

individual. Evidence of payment includes copies of tuition receipts,

The date you submitted to the signing tax return preparer the part

cancelled checks, credit card or ACH debit statements. A

of the return for which you were responsible (if you are a nonsigning

nonresident alien, an individual whose tuition and related expenses

tax return preparer).

are paid entirely with a tax-free scholarship or by a third party under

a formal billing arrangement are generally ineligible for the AOTC.

These records may be kept on paper or electronically in the

manner described in Revenue Procedure 97-22 (or later update).

If the individual has not received a Form 1098-T from an eligible

Revenue Procedure 97-22 is on page 9 of Internal Revenue Bulletin

educational institution, whether domestic or foreign, required to

1997-13, which is available at IRS.gov/pub/irs-irbs/irb97-13.pdf.

furnish the form (for example, the institution otherwise required to file

the Form 1098-T doesn’t file or refuses to do so) by January 31 of

Additional Resources

the year following the year to which the AOTC relates or date the

return is filed claiming the AOTC, whichever is later, your client may

1. Additional information regarding the eligibility rules for the

still claim the AOTC if certain actions are taken. These actions

EIC may be found in section 32 and in Pub. 596.

include: (1) requesting after January 31 but before the due date for

2. Additional information regarding the eligibility rules for the

the return on which the credit is claimed that the institution furnish a

CTC/ACTC may be found in section 24 and in Pub. 972.

Form 1098-T; and (2) fully cooperating with the educational

institution’s efforts to gather the information needed to furnish the

3. Additional information regarding the eligibility rules for the

Form 1098-T. If the individual doesn’t receive a Form 1098-T, you

AOTC may be found in section 25A, in Pub. 970, and on Form 8863

must verify the individual’s enrollment at the institution and payment

and the Instructions for Form 8863.

of qualified tuition and related expenses as described earlier.

Paperwork Reduction Act Notice. We ask for you to obtain the

In 2017, Form 1098-T reports the amount billed by the institution,

information on this form to carry out the Internal Revenue laws of the

or the amount the student paid to the institution, for qualified tuition

United States. You are required to obtain this information.

and related expenses during the calendar year, as well as certain

refunds and reimbursements and scholarships and grants

You are not required to obtain the information requested on a

processed and administered by the school. A taxpayer may claim

form that is subject to the Paperwork Reduction Act unless the form

the AOTC only for qualified tuition and related expenses actually

displays a valid OMB control number. Books or records relating to a

paid during the calendar year. Amounts reported on the Form

form or its instructions must be retained as long as their contents

1098-T may not accurately reflect amounts actually paid for qualified

may become material in the administration of any Internal Revenue

expenses. Therefore, you must verify the amount of qualified tuition

law. Generally, tax returns and return information are confidential, as

and related expenses actually paid by, or on behalf of, the student to

required by Internal Revenue Code section 6103.

determine the amount of the AOTC for which your client may claim

the AOTC. For more information on eligibility for the AOTC and on

The time needed to complete and file this form will vary

determining the expenses that qualify for the AOTC, see Pub. 970,

depending on individual circumstances. The estimated average time

Form 8863, and the Instructions for Form 8863.

is:

Part V—Credit Eligibility Certification

Learning about the law or the form

18 min.

. . . . . . .

Preparing and sending the form

1 hr., 49 min.

. . . . . . . . .

Line 12

Failure to meet the due diligence requirements for claiming the EIC,

the CTC/ACTC, and/or the AOTC could result in a $510 penalty for

If you have comments concerning the accuracy of these time

each failure. For example, if you are paid to prepare a return

estimates or suggestions for making this form simpler, we would be

claiming the EIC, the CTC/ACTC, and the AOTC, and you fail to

happy to hear from you. See the instructions for the tax return with

meet the due diligence requirements for all of these credits, you

which this form is filed.

could be subject to a penalty of $1,530.

-4-

Instructions For Form 8867 - Paid Preparer'S Due Diligence Checklist For The Earned Income Credit (Eic), The Child Tax Credit (Ctc)/additional Child Tax Credit (Actc), And/or The American Opportunity Tax Credit (Aotc) - 2017 Page 4

Related Articles

Related forms

Related Categories