Tax Credit Compliance Flashcards

Which form combines various business credits into a single general business credit?

Answer: Form 3800

Form 3800 is the General Business Credit form that aggregates eligible business credits.

How many years may unused general business credits generally be carried forward?

Answer: 20 years

Unused general business credits carry back 1 year and forward 20 years.

Which form must a paid preparer complete to document due diligence for an Earned Income Tax Credit claim?

Answer: Form 8867

Form 8867, Paid Preparer's Due Diligence Checklist, documents the preparer's due diligence.

For how long must a preparer generally retain Form 8867 and related due diligence records?

Answer: 3 years

Preparers must keep due diligence records for three years after the return is filed or the due date.

What penalty may apply to a taxpayer who files a claim for refund or credit with an excessive amount without reasonable cause?

Answer: A 20% penalty under Section 6676

Section 6676 imposes a 20% penalty on the excessive portion of a refund claim lacking reasonable cause.

To receive the full increased Section 48 or 45 credit for a qualifying clean energy project, which requirement generally applies for facilities over 1 MW AC that began construction after January 28, 2023?

Answer: Prevailing wage and apprenticeship requirements

Larger projects must meet prevailing wage and apprenticeship rules to earn the five-times multiplier credit rate.

If a taxpayer fails to pay prevailing wages on a clean energy project, what is a standard cure available under the rules?

Answer: Pay workers the shortfall plus interest and a penalty

The taxpayer can cure by paying back wages with interest at the federal short-term rate plus 6%, and a $5,000 penalty per worker.