Is this an ATX glitch? form 8867 red efile error

[BulldogTom]

Taxpayers got advance CTC.   Got a little too much and need to pay some back.   8812 added to the return to calculate the overpayment.   Diagnostics giving me an error that the 8867 is not needed since no credit was claimed.   

Anyone else seeing something like this?   I think the credit (in a reduced amount) is actually being claimed but not on the 1040 line the software expects it to be on.   

This is a red error I need to fix.

Thanks

Tom
Longview, TX

[jklcpa]

It may be a glitch if there was a credit shown on line 12 of the 8812, but if line 12 is -0- then 8867 isn't required.  That appears to be a factor in determining the need to include the 8867, so the diagnostics may or may not be correct.  In general, reading code that deals with the due diligence of "determining eligibility" of these credits I'd agree with you, however looking at the instructions for 8867 that I've quoted below, it may not be a required form for inclusion with the return you are trying to file.  After reading the quote immediately below, if you do remove the 8867, I think you should still keep notes and due diligence Q&A to document your work and determinations anyway to be safe. 

Quote

From 8867 instructions - (bold is mine)

 

Form 8867 must be filed with the taxpayer’s return or amended return claiming the EIC, the CTC/ACTC/ODC, the AOTC, and/or HOH filing status.

If your client received advance child tax credit payment(s) in the tax year, but the amount of line 12 on the client's Schedule 8812 is zero, then you do not have to file Form 8867 with the tax return unless the client is claiming any of the other credits discussed earlier and/or HOH filing status. If the client is claiming any of the other credits discussed earlier and/or HOH filing status, then Form 8867 must be filed with the return, but you should not check the CTC/ACTC/ODC box or complete Part III.

 

If you need the actual reference and language in the code, it says this (bold is mine):

Quote

§ 1.6695-2 Tax return preparer due diligence requirements for certain tax returns and claims.

(a) Penalty for failure to meet due diligence requirements -

(1) In general. A person who is a tax return preparer (as defined in section 7701(a)(36)) of a tax return or claim for refund under the Internal Revenue Code who determines the taxpayer's eligibility to file as head of household under section 2(b), or who determines the taxpayer's eligibility for, or the amount of, the child tax credit (CTC)/additional child tax credit (ACTC) under section 24, the American opportunity tax credit (AOTC) under section 25A(i), or the earned income credit (EIC) under section 32, and who fails to satisfy the due diligence requirements of paragraph (b) of this section will be subject to a penalty as prescribed in section 6695(g) (indexed for inflation under section 6695(h)) for each failure. A separate penalty applies to a tax return preparer with respect to the head of household filing status determination and to each applicable credit claimed on a return or claim for refund for which the due diligence requirements of this section are not satisfied and for which the exception to penalty provided by paragraph (d) of this section does not apply

 

[jklcpa]

I reread your post and sounds like the return has some amount of reduced credit on line 12 and some needs to be paid back. 

I can tell you that I have a similar return in the works right now and Drake IS requiring the 8867 and DD entries.

ETA -  My client has a reduced credit on line 12 but their ACTC didn't exceed that and and still have small credit available that is being shown on the return so the 8867 and other DD notes IS required.

I played around with my client's return and increased the ACTC figures to exceed the allowed credit on line 12, and Drake removed the 8867 from the filing for me but didn't give me and warning errors or messages about its removal at all, and it left my other due diligence documentation in the set if I wanted to include that in the set.

[BulldogTom]

Line 12 of the 8812 has an amount.   Line 19 of the 1040 does not.   They are paying back.   I think I will call ATX and see what they say, but if they can't fix it, then I will remove for Efile and then add back in after it is accepted.

Thanks Judy.

Tom
Longview, TX

[jklcpa]

3 minutes ago, BulldogTom said:

Line 12 of the 8812 has an amount.   Line 19 of the 1040 does not.   They are paying back.   I think I will call ATX and see what they say, but if they can't fix it, then I will remove for Efile and then add back in after it is accepted.

Thanks Judy.

Tom
Longview, TX

Tom, I was playing with my client's return and made some edits to my post above. Hope it helps.

[jklcpa]

Don't think it's required in your case.  Sorry for all the posts and fixes. Having a very bad day here.  Ugh!

[BulldogTom]

I don't know why I bother to call support.   They never have a person there that can even look at the issue.   Then they ask for the same info over and over again, then they say a technical support tech will have to look at it, at which point they ask again for your Cust ID and name and number.   

I miss the days of Maine customer support......

Tom
Longview, TX

[Abby Normal]

Sounds like a plus, not having to file an 8867.