More than 149 million individual returns were filed last year and over 83 million of those were prepared by a paid return preparer
He continued by noting that tax preparers
, along with CPAs and tax attorneys, who abrogate their ethical responsibility to that system in favor of helping clients evade tax--"the most unpatriotic thing I can think of'--are coming under closer scrutiny from the IRS, which "more and more is realizing that one bad preparer
could be worse than 100 bad taxpayers.
UNDER IRC [section] 6694, a tax preparer
who prepares a tax return or claim of refund that includes an understatement of liability due to an unreasonable position is liable for a penalty if he or she knew or reasonably should have known of the position.
The CFA paper states that approximately 56% of individual tax returns were completed by a paid preparer
in tax year 2011, more often for more complex returns.
After failing to win court approval for its mandatory tax return preparer
regulation program, the IRS in late June introduced a voluntary certification program to take its place (Rev Proc.
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.
The National Association of Tax Professionals (NATP), a group representing 20,500 credentialed and noncredentialed preparers
alike, voiced concern that the Service's decision to exempt employees of CPAs, attorneys and enrolled agents would give a competitive advantage to those credentialed firms over their registered preparer
000 tax return preparers
who have Preparer
Tax Identification Numbers can now renew their PTINs for the 2012 filing season.
GAO was asked to (1) describe IRS's plans for implementing and ensuring paid preparer
compliance with the requirements; (2) assess IRS's resource estimates for the requirements; and (3) assess IRS's plans to use the requirements to improve taxpayer compliance and evaluate their effect.
In the past, Internal Revenue Service ORS) standards of care were highly subjective and the tax preparer
penalty statute was limited to federal income tax returns.
Require that all paid tax return preparers
register with the IRS and obtain a preparer
tax identification number.