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The IRS is increasing its oversight over claims for the Earned Income Tax Credit (EITC) and is demanding help from paid tax preparers. The EITC is a refundable credit, meaning that it's payable to a taxpayer even if it exceeds tax liability. When the EITC is higher than a person's amount of tax, the result is a credit that's refunded to the individual.

Over 26 million people received nearly $59 million of EITC payments for the 2009 tax year. IRS audits have determined that a substantial percentage of EITC claims are illegitimate. Consequently, tax return preparer study provides a number of due diligence requirements when dealing with taxpayer qualification for the EITC....