Most tax pros assume their due diligence notes would hold up if the IRS came asking.
A quick question in the interview. A note in the file. Good enough.
The IRS does not see it that way.
For returns filed in 2026, the penalty for failing due diligence requirements is $650 per failure. And because it applies per credit or filing status, one return claiming the EITC, the CTC, the AOTC, and Head of Household can cost you $2,600. One return. The amount adjusts upward for inflation every year, so this is the cheapest it will ever be.
An office running hundreds of returns without a documented interview process is carrying serious exposure without knowing it.
What the IRS actually requires
Due diligence is four things, not one. You must complete and submit Form 8867 with the return. You must complete the credit computation worksheets. You must meet the knowledge requirement, which means asking follow-up questions any time the information a client gives you seems incomplete, inconsistent, or incorrect. And you must keep the records for three years: the form, the worksheets, copies of documents you relied on, and notes on how and when you got the information and from whom.
That third one is where most preparers get caught. Checking the boxes on Form 8867 is not the same as doing the interview the form certifies you did.
The questions change with the scenario
Here is the part nobody tells new preparers. There is no single list of due diligence questions.
A Head of Household claim needs questions about who lived in the home and who paid for it. An EITC claim with self-employment income needs questions about how that income was earned and recorded. A client claiming a niece as a dependent needs a different conversation than a client claiming their own child.
Preparers know this. It is why so many end up staring at a blank page at the start of every appointment, trying to remember what to ask this particular client, or asking the same generic questions for every scenario and hoping it covers them.
The fix is a repeatable interview built for the scenario in front of you. Here is a shortcut to your starting point.
Copy this prompt
Paste this into ChatGPT or any AI chatbot and fill in the brackets:
You are a tax compliance assistant for a paid preparer. Build a due diligence interview for this client: Filing status: [FILING STATUS] Credits claimed: [EITC / CTC / ACTC / ODC / AOTC / HOH] Income types: [W-2 / SELF-EMPLOYMENT / 1099 / OTHER] Dependents: [NUMBER AND RELATIONSHIP TO TAXPAYER] Give me: 1. The questions I must ask for each credit claimed, written in plain language I can read to the client 2. Follow-up questions to use if an answer seems incomplete or inconsistent 3. The documents I should request and note in the client file 4. A short interview summary template I can fill in and save as my record Format everything as a checklist I can work through during the appointment.
One thing to be clear about. This gives you a starting point, not a shield. You still apply professional judgment, you still complete and file Form 8867, and you still keep the records for three years. What the prompt removes is the blank page.
What this does not fix
The interview is thirty minutes of judgment. It is the part of your job that deserves your full attention.
The data entry that comes after it is not. Typing the same numbers from the documents into your tax software, field by field, return after return, is hours of work that judgment plays no part in.
That part we automated. See how Wizzy fills the return directly in your software.
