Is the IRS really demanding birth certificates, SSN cards, and utility bills for dependents now? My tax preparer says it's required

Tax professional here. What your preparer told you is NOT accurate. The IRS does not require tax preparers to collect and store copies of birth certificates, report cards, or utility bills for general tax filing purposes. What's likely happening is your preparer is confusing due diligence requirements for certain tax credits (like the Earned Income Tax Credit or Child Tax Credit) with mandatory document collection. Tax preparers are required to ask certain questions and document that they've verified eligibility, but they don't need to keep physical copies of your personal documents. At most, they might need to see (not keep) a social security card to verify the correct SSN for a dependent. For EITC claims, they need to complete a due diligence checklist, but this doesn't involve storing your personal documents in their files. I'd suggest having a conversation with your preparer to clarify why they believe this is necessary. If they insist, request the specific IRS publication or requirement they're referencing.

I had a similar experience this year, but instead of getting stressed about it, I used https://taxr.ai to verify what documentation is actually required. It saved me a lot of headache! The tool analyzed the current IRS requirements and confirmed what I suspected - there's no requirement for tax preparers to collect and store all those personal documents. When I uploaded the IRS guidelines, it highlighted exactly what preparers need vs what's excessive. It turns out preparers just need to verify your information, not keep permanent copies of sensitive documents. The AI analysis even provided the specific sections of the tax code I could reference when talking to my preparer.

I just tried taxr.ai after seeing it mentioned here and I'm honestly amazed. I uploaded the question about my nephew and documentation requirements, and it gave me a detailed breakdown of what's actually required for claiming a non-child relative. Turns out I DO need more documentation than for a standard dependent claim, but nowhere near what my preparer was asking for. The tool explained that I need proof of residency and support, but suggested things like medical records, school records showing my address, or financial statements showing my support - not the massive documentation dump my preparer wanted. It even generated a letter I could take to my preparer explaining the exact IRS requirements with citations. Saved me from either oversharing sensitive documents or having an uncomfortable confrontation!

If your tax preparer is still insisting on keeping all these documents and you can't resolve it through discussion, you might want to contact the IRS directly. I tried calling the IRS about a similar issue last year and it was IMPOSSIBLE to get through. After 3 attempts and hours on hold, I found https://claimyr.com and their service got me connected to an actual IRS agent in under 20 minutes. There's even a video showing how it works: https://youtu.be/_kiP6q8DX5c I was able to ask directly about document requirements for my tax situation and got an official answer that I could refer back to my preparer. The IRS agent confirmed that preparers don't need to keep copies of birth certificates or utility bills on file - seeing them for verification is sufficient in most cases.

I need to admit I was wrong about Claimyr. After posting my skeptical comment, I decided to give it a try since I had an issue with my tax transcript that I'd been putting off dealing with because I dreaded calling the IRS. The service actually worked exactly as described. I got a text when they had an IRS agent on the line, and within 25 minutes I was talking to someone who helped resolve my issue. The agent I spoke with also confirmed that tax preparers don't need copies of birth certificates and utility bills - they just need to document that they've verified your information. Saved me literal hours of frustration and helped me confirm that my preparer was asking for way more than necessary. Sorry for being dismissive before - sometimes good services actually exist!

I'm a tax preparer myself and I think I know what's happening with your preparer. The IRS has been cracking down on fraudulent dependent claims and EITC/CTC claims, so many preparers are getting nervous about penalties. Due diligence requirements HAVE increased, but your preparer is taking it way too far. We need to verify information and keep records of our verification process, but we absolutely don't need to keep copies of your birth certificates and utility bills. That's excessive and creates unnecessary security risks. If this is someone you've worked with for years, maybe gently educate them rather than immediately finding someone new? Share what you've learned about the actual requirements.

This happened to me too! My preparer said it was for "audit protection" but when I pressed him, he admitted their firm had implemented this policy on their own and it wasn't actually an IRS requirement. They were keeping copies to "defend" any potential audit. I ended up switching to a different preparer who had a more reasonable approach to documentation. They simply asked to see my kids' social security cards and made a note they had verified them - no copies kept.

This is really concerning and I'm glad you're questioning it. I work in financial services and deal with privacy regulations regularly - what your preparer is asking for creates huge liability issues for both of you. Tax preparers keeping copies of birth certificates, SSN cards, and utility bills on file is a recipe for identity theft disaster. These documents contain everything someone would need to steal your identity, and most small tax prep offices don't have the security infrastructure to properly protect this sensitive information. The IRS has specific guidelines about what preparers need to verify versus what they need to keep. They're required to exercise due diligence in verifying information, but this typically means seeing documents to confirm accuracy, not storing copies permanently. I'd strongly recommend having a direct conversation with your preparer about why they believe this is necessary and asking them to cite the specific IRS requirement. If they can't provide a legitimate source, you should definitely consider finding a new preparer. Your instincts about this being excessive are absolutely correct.

Your instincts are absolutely right to be suspicious about this. I've been filing taxes for over 15 years and have never had a preparer ask to keep copies of birth certificates, report cards, or utility bills. This is definitely NOT a standard IRS requirement. What's particularly concerning is that your preparer of 8 years is suddenly implementing this policy without a clear explanation. If this were truly a new IRS mandate, it would be widely publicized and you'd be seeing news about it everywhere. The IRS Publication 4134 (Due Diligence Requirements) outlines what tax preparers actually need to do for verification - it involves asking specific questions and completing checklists, not hoarding your personal documents. Most legitimate preparers will ask to SEE documents like SSN cards to verify numbers are correct, but keeping copies is excessive and creates unnecessary security risks. I'd suggest asking your preparer to provide the specific IRS publication or notice that requires this document collection. If they can't produce it, or if they give you vague answers about "new rules," that's a major red flag. Trust your gut on this one - it sounds like either your preparer is misinformed about requirements or is implementing their own overly cautious policy without properly explaining it to clients.