Due diligence

Two different rules travel under the name due diligence. One is the professional standard in the practice regulation. The other is a statutory requirement attached to specific credits and to head-of-household filing status.

A scoped rule is not a rule about everyone

Several of these rules are written with a scope: they reach certain persons, certain conduct, or certain returns. The scope is part of the rule, so we state who a provision reaches rather than turning it into a rule about everyone.

What the authority says

A practitioner must exercise due diligence in preparing or assisting in the preparation of, approving and filing tax returns, documents, affidavits and other papers relating to Internal Revenue Service matters.
A practitioner must exercise due diligence in determining the correctness of oral or written representations made to the Department of the Treasury and to clients.
A practitioner is presumed to have exercised due diligence if the practitioner relies on the work product of another person and used reasonable care in engaging, supervising, training and evaluating that person.
A penalty applies to a tax return preparer who fails to furnish a completed copy of the return or claim for refund to the taxpayer.
A penalty applies to a tax return preparer who fails to sign a return or claim for refund that the preparer is required to sign.
A penalty applies to a tax return preparer who fails to furnish the preparer's identifying number as required.
A penalty applies to a tax return preparer who fails to retain a copy of the return or a list of returns prepared, as required.
Under § 6695(g), a penalty applies for each failure to comply with due-diligence requirements prescribed by the Secretary with respect to determining eligibility for, or the amount of, the earned income credit, the child tax credit and related credits, the American Opportunity Tax Credit, and head-of-household filing status.
A tax return preparer who determines eligibility for, or the amount of, an applicable credit or head-of-household filing status must meet the due-diligence requirements of this section for each such determination.
The preparer must complete Form 8867, Paid Preparer's Due Diligence Checklist, based on information the preparer obtained from the taxpayer or otherwise reasonably obtained, and must submit it in the manner required.
The preparer must complete the applicable worksheets or otherwise record the computation of the credit amount.
The preparer must not know, or have reason to know, that any information used in determining eligibility or the amount is incorrect, and must make reasonable inquiries where information appears incorrect, inconsistent or incomplete, contemporaneously documenting those inquiries and the responses.
The preparer must retain the checklist, worksheets, a record of how and when the information was obtained, and the documents relied on, for three years as specified in the regulation.
Form 8867 must be completed by a paid tax return preparer who is preparing a return or claim for refund claiming the earned income credit, the child tax credit or additional child tax credit or credit for other dependents, the American Opportunity Tax Credit, or head-of-household filing status.
The completed form must be filed with the return or claim for refund, and the preparer must keep the records the instructions specify.
A separate determination is required for each covered credit or status claimed on the return.

Every source on this page shows the body that issued it and the date we read it. The text behind this centre was last read on 2026-08-24.

Where this comes from

31 C.F.R. § 10.22 — Diligence as to accuracyElectronic Code of Federal Regulations. Read for: A practitioner must exercise due diligence in preparing or assisting in the preparation of, approving and filing tax returns, documents, affidavits and other papers relating to Internal Revenue Service matters. Read on 2026-08-16.
26 U.S.C. § 6695 — Other assessable penalties with respect to the preparation of tax returns for other personsUnited States Code (GPO, govinfo). Read for: A penalty applies to a tax return preparer who fails to furnish a completed copy of the return or claim for refund to the taxpayer. Read on 2026-08-16.
26 C.F.R. § 1.6695-2 — Tax return preparer due diligence requirements for certain tax returns and claimsElectronic Code of Federal Regulations. Read for: A tax return preparer who determines eligibility for, or the amount of, an applicable credit or head-of-household filing status must meet the due-diligence requirements of this section for each such determination. Read on 2026-08-16.
Instructions for Form 8867, Paid Preparer's Due Diligence ChecklistInternal Revenue Service. Read for: Form 8867 must be completed by a paid tax return preparer who is preparing a return or claim for refund claiming the earned income credit, the child tax credit or additional child tax credit or credit for other dependents, the American Opportunity Tax Credit, or head-of-household filing status. Read on 2026-08-16.

What we are not saying here

Nothing on this page should be read as saying Applies to practitioners as Part 10 defines them, not to every person who prepares a return.; This is professional diligence and is a different rule from the statutory due-diligence requirement of § 6695(g).; Dollar amounts under this section are adjusted for inflation and must always be stated with the year they apply to.; The due-diligence requirement reaches only the credits and filing status the statute and the regulations name. It is not a rule about every return.; The obligation attaches to the covered credits and to head-of-household status. A return with none of those has no requirement under this section.; Says nothing about representation, identifiers or programme participation.; The form is required only where a covered credit or status is claimed.; Instructions are updated annually and are review-dated for that reason..

Where to go next

Whether the preparer definition reaches what I didConduct and compensation, in the order the text asks about them.
What a preparer identifying number isWhen the Code requires it, and what holding one does not settle.
How electronic filing participation worksA firm-level programme with a firm-level identifier.
Who may deal with the IRS for a taxpayerEligibility and authorization are two separate requirements.
What enrolled agent, CPA and attorney each meanSide by side, in the regulation's order, with no ranking.
Whether the practice rules reach mePart 10 is written with a scope, and the scope is part of the rule.
How IRS discipline works, and how to check itThe three sanctions, the process behind them, and what a published record does and does not say.
What each preparer penalty reachesTrigger, standard and defence, stated separately for each one.
When client information may be disclosed or usedDefined terms, consent, and the exceptions the rules state.
Where bookkeeping ends and preparation beginsWhat the federal definitions look at, which is not the job title.
How this centre works and where it stopsThe limits we hold ourselves to, including the state boundary.
The authority behind all of itEvery source, what it was read for, and the date it was read.

This is general education for people who work in tax, not legal or tax advice, and not a determination about anyone's status or obligations. Rules change and facts matter. For a decision about your own situation or your own practice, take advice from a licensed professional.