Which of the following is a due diligence requirement for EIC?

Retaining records is a crucial due diligence requirement for claiming the Earned Income Credit (EIC). This involves keeping documentation that supports the information claimed on the tax return, such as proof of earned income, residency, and the number of dependents. Documentation may include W-2 forms, pay stubs, and any relevant tax documents. This requirement helps ensure that taxpayers can substantiate their eligibility and the amounts they claim, should they face review or audit by the IRS.

The importance of this requirement lies in the IRS's need for accuracy and accountability in tax filings, especially for refundable credits like the EIC, which can significantly impact a taxpayer's financial situation. Proper record retention not only aids in compliance but also protects taxpayers if there are questions or disputes regarding their EIC claims.