Final answer:
A tax preparer is required to complete and submit Form 8867 when preparing a taxpayer's return and claiming certain tax credits. This form helps ensure that the tax preparer has met the due diligence requirements set by the IRS.
Step-by-step explanation:
A tax preparer is required to complete and submit Form 8867, Paid Preparer's Due Diligence Checklist, when they prepare a taxpayer's return and claim certain tax credits, such as the Earned Income Credit (EIC) or the Child Tax Credit (CTC). This form helps ensure that the tax preparer has met the due diligence requirements set by the Internal Revenue Service (IRS) when preparing the return and claiming these credits.
Form 8867 consists of multiple sections that the tax preparer must complete to demonstrate that they have conducted the necessary due diligence. These sections include verifying the taxpayers' eligibility for the credits, reviewing the supporting documentation provided by the taxpayers, and keeping records of the due diligence performed. The form must be signed and submitted with the taxpayer's return.