Question

a ref Question 34 of 75. If a self-employed taxpayer fails to bring documentation to prove theit income but wants to claims the Earned income Credit, the Child Tax Credit/Additional Child Tax Credit, andlor the American Opportunity Credit, the Tax Professional O Must be given other evidence that the self-employment income is correct and complete before completing and signing the O Cannot prepare the return. Que return Pen OMay not claim any of these credits on the taxpayer's return. Should instruct the taxpayer to prepare a Form 1099-MISC to document their own income. □Mark for follow up

Answer 1

Answer = Must be given other evidence that the self-employment income is correct and complete before completing and signing the return.

Explanation:
Tax preparer should ensure income is correct with supporting necessary evidences

Tax preparers should ensure that the amount of net self-employment income reported is correct

The preparer should ask sufficient questions of clients claiming self-employment income to be satisfied that:

1) the client is actually conducting a business,

2) the client has records to support income and expenses, or can reasonably reconstruct income and expenses records, and

3) the client has included all income and related expenses on Schedule C, Profit or Loss from Business (Sole Proprietorship).

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