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Ed is a tax preparer

Accounting

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Ed is a tax preparer. He has done Tom and Marilyn's return for over a decade. As in past years, they will claim their nephew, Chip, age 9, on their tax return. Chip has lived with them for several years since the death of his parents. Which statement best describes how Ed will need to structure his due diligence notes?

A Ed does not need to write due diligence notes because Tom and Marilyn are prior clients.

B Ed needs to write, "Same as last year," in the space for due diligence notes, since nothing has changed.

C Ed needs to state that Tom and Marilyn are claiming Chip and provided all of his support. No additional information is needed.

D Ed needs to explain why Chip's parents are not claiming him and whether or not they live in the home. Ed's due diligence notes should also address how Chip's parent's are related to the taxpayers. It is a best practice to use the names of the parents.