In addition, the IRS indicates that an interview with the tax
preparer should take place, and the following areas may be covered:
The Internal Revenue Service (IRS) released proposed regulations that would establish a fee for individuals who apply for a
preparer tax identification number (PTIN).
When an unlicensed tax
preparer is caught, Wagner said, all the returns they've prepared are audited and their clients can end up with a big bill for back taxes, illegal refunds, interest and penalties.
* Require that all paid tax return
preparers register with the IRS and obtain a
preparer tax identification number.
Following a six-month review of the paid tax
preparer industry, the IRS is drawing up regulatory requirements that will have paid
preparers register with the IRS and pay a user fee, and make
preparer tax identification numbers mandatory.
This year, tax
preparer education and training is even more important, as all Illinois tax professionals, regardless of experience level, will be required to obtain a PTIN under Internal Revenue Service ("IRS") regulations.
When computing any of the specified credits, the tax return
preparer must complete the applicable worksheet in the instructions to Form 1040, U.S.
A federal district court held that the IRS has the authority to require tax return
preparers to obtain
preparer tax identification numbers (PTINs) but that it cannot charge a user fee for issuing them, lhe plaintiffs in the case, tax return
preparers, brought a class action suit against the IRS claiming that it lacks legal authority to require
preparers to obtain PTINs and to charge a fee for issuing them.
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." Consequently, the penalties for such behavior can be severe.
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.