For the multitudes of accountants, bookkeepers, and others who do not think of themselves as preparing 'returns,' but whose work is ultimately incorporated into a return (although not reflected on a document with and IRS form number on it), the 'list' approach does nothing to provide them with any indication of whether they will be considered a return preparer
When you meet the preparer
, ask to see these credentials.
These costs will be borne by the preparer
, the taxpayer, or both.
Clarify that, subject to the same limitations that apply in determining reasonable cause, a tax return preparer
may rely on advice furnished by the taxpayer, an adviser, another tax return preparer
, or other party in determining if the reasonable belief/more likely than not and the reasonable basis standards are satisfied.
The differing standards present a potential for a conflict between a preparer
and a taxpayer/client.
If you need help finding a tax preparer
, you can search the National Association of Tax Professionals online database by zip code (www.
Without substantially more explanation, the guidelines establish a highly subjective test for determining whether (i) the case law is well settled and its application indisputable and (ii) a taxpayer, tax preparer
, or advisor has developed a reasonable interpretation of the law and, hence, exercised the due diligence necessary to avoid a penalty.
Whether you're using a computer program, live preparer
, or combination of both, you need to provide the required inputs.
of a related return can also be considered a preparer
where the related return represents a "substantial portion" of the other return - for example, where a K-1 issued for a partnership represents the only income on the partner's individual return.
It states that "a preparer
is considered to have willfully attempted to understate liability if the preparer
disregards, in an attempt wrongfully to reduce the tax liability of the taxpayer, information furnished by the taxpayer or other persons.
The directory will not include tax preparers
tax identification numbers who are not members of any of the above-listed groups of preparers
Then after the taxpayer leaves, the preparer
falsifies the math to boost the refund, files the return and pockets the difference.
Specifically, an understatement penalty may be imposed on a tax preparer
who prepares a tax return or a claim for refund that shows an understatement of tax liability.
If you pay someone to prepare your tax return, make sure that tax preparer
As of 2011, all tax professionals were required to obtain from the IRS a preparer
tax identification number (PTIN) and register their "license" annually.