A return goes out, and the Form 8867 due-diligence file behind it sits in whatever folder it landed. Then an amendment request comes in, or a client calls with a follow-up question, and someone has to find that record again — the checklist, worksheets, documents actually relied upon, and notes on what was asked and answered. In small bilingual offices, that retrieval moment can become difficult — naming conventions may drift or staff may turn over, for example — and a file that made sense when created can be harder to use months later.
This article lays out one way to organize that archive before the next amendment or follow-up round arrives. It's an office workflow suggestion, not an IRS-mandated procedure, built around current IRS due-diligence guidance on the records paid preparers should keep on hand.
What this reset is — and isn't
This is a three-step way to structure records paid preparers must keep under Form 8867 due diligence — not a new compliance requirement and not a universal document checklist. Current IRS due-diligence guidance describes the categories of records a preparer's file should contain; this reset groups them so they can be found again quickly. It doesn't cover every situation — specific facts and credits can call for judgment beyond any three-step structure.
Step 1: The completed checklist and applicable worksheets
Keep the completed Form 8867 checklist with the applicable worksheets or computations used for the covered credits on that return. IRS guidance on completing Form 8867 is explicit that the form is not a substitute for performing the required due-diligence actions; the checklist and worksheets document that work and the underlying computations, and can help show how requirements were addressed.
Step 2: The documents actually relied upon, and how they were obtained
Keep copies of the documents the preparer actually relied on, with a note on how, when, and from whom that information was obtained. This is narrower than "every document a client could provide." IRS guidance on due-diligence knowledge and recordkeeping is clear that specific documentation is generally not required in every case — the obligation attaches to what was actually relied upon. Standardizing one document checklist for every client risks implying a requirement that doesn't exist; retain what was used for that specific return, with provenance noted at the time.
Step 3: The follow-up questions and responses
Keep the record of any additional questions asked and the client's responses. IRS due-diligence rules and IRS guidance on completing Form 8867 both point to this documentation as part of showing reasonable inquiries were made. As an office workflow recommendation — not an IRS requirement — this reset suggests capturing that record at the time and linking each note to the specific fact it clarifies, rather than keeping a general log.
How long to keep it, and what it doesn't establish
The IRS's tax-preparer due-diligence rules set a retention period of at least three years for these records; this reset simply organizes what's already being kept so it can be retrieved within that period. None of this — checklist, worksheets, documents, or a contemporaneous record — establishes eligibility for a credit on its own. The IRS is explicit that Form 8867 is not a substitute for performing every required due-diligence action; an orderly file helps preserve the record of what was documented, not a stand-in for performing the work. It carries no promise about audit outcomes, penalty exposure, or compliance status.
Where Intaxion fits
Intaxion is not tax-preparation software and doesn't determine eligibility for any credit or filing position. It helps on the workflow side: intake, gathering documents a preparer has identified as relevant, routing follow-up questions to clients and logging responses, and keeping communications organized so an amendment or follow-up request is easier to assemble and review. That's a complement to the due-diligence work a preparer already does, not a replacement for it.
If retrieving a Form 8867 file has been a recurring headache, it's worth checking how long your last few amendments took to reassemble — and where the friction was.
Sources: IRS Form 8867 instructions, tax-preparer due-diligence rules, due-diligence knowledge and recordkeeping requirements, completing Form 8867 guidance, and Form 8867 overview.
Sources
- https://www.irs.gov/instructions/i8867
- https://www.irs.gov/tax-professionals/eitc-central/tax-preparer-due-diligence-rules
- https://www.irs.gov/tax-professionals/eitc-central/due-diligence-requirements-for-knowledge-and-recordkeeping
- https://www.irs.gov/tax-professionals/eitc-central/completing-form-8867
- https://www.irs.gov/forms-pubs/about-form-8867
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