Even before passing the registered tax return preparer exam anyone preparing tax forms must comply with IRS Circular 230 provisions. This publication contains several standards of practice for tax professionals. Critical parts of Circular 230 for tax preparer study are the guidelines for due diligence with taxpayer information.
The process for tax return preparation entails making a reasonable effort to determine that taxpayer representations are correct. This doesn't mean that tax return preparers are required to conduct a detailed audit verification of every figure a client supplies. But, the IRS Office of Professional Responsibility (OPR) does hold tax practitioners to a benchmark of quality.
A measure of OPR criteria is elucidated by a 2010 ruling to bar a CPA from the tax preparation business for failure to exercise due diligence under Circular 230. The case claimed that the CPA did not sufficiently determine that figures reported on tax returns were correct. The specific tax returns noted by OPR were those of a corporation and its married shareholders. In addition, the OPR alleged that the CPA failed to comply with the Circular 230 requirement to advise clients about potential penalties and provide opportunities to avoid penalties.
This situation is indicative of the control OPR is increasingly exercising over tax practitioners. OPR director Karen L. Hawkins pointed out the serious IRS tax preparer requirements to comply with accountability standards. Basically, OPR demands that tax practitioners make inquiries about information furnished by clients to assure that it appears correct, consistent, and complete. In addition, tax preparation professionals may not ignore the implications of known information. Any violation is considered malpractice.
Tax return preparers have obligations to represent their taxpayer clients rather than serve the interests of the IRS. However, honest taxpayers share the same objective as the IRS. Furthermore, the goals of a professional with a tax preparer license are aligned with any taxpayer who wants an accurate return and no IRS trouble.
The only difficulty for paid tax preparers is clients who want their tax returns manipulated to increase the refund. Tax practitioners should refuse service to these individuals.
Otherwise, licensed tax practitioners should not fear that OPR will conscript them to perform partial audits of taxpayer records. Although OPR has aimed slightly in this direction, Circular 230 only mandates reasonable acts to assure tax return accuracy. Consequently, tax return preparers may still rely upon mere statements from clients that appear accurate. However, a sound procedure for every tax practice is maintaining detailed notes about discussion with clients whereupon income and expenses are revealed.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.
The process for tax return preparation entails making a reasonable effort to determine that taxpayer representations are correct. This doesn't mean that tax return preparers are required to conduct a detailed audit verification of every figure a client supplies. But, the IRS Office of Professional Responsibility (OPR) does hold tax practitioners to a benchmark of quality.
A measure of OPR criteria is elucidated by a 2010 ruling to bar a CPA from the tax preparation business for failure to exercise due diligence under Circular 230. The case claimed that the CPA did not sufficiently determine that figures reported on tax returns were correct. The specific tax returns noted by OPR were those of a corporation and its married shareholders. In addition, the OPR alleged that the CPA failed to comply with the Circular 230 requirement to advise clients about potential penalties and provide opportunities to avoid penalties.
This situation is indicative of the control OPR is increasingly exercising over tax practitioners. OPR director Karen L. Hawkins pointed out the serious IRS tax preparer requirements to comply with accountability standards. Basically, OPR demands that tax practitioners make inquiries about information furnished by clients to assure that it appears correct, consistent, and complete. In addition, tax preparation professionals may not ignore the implications of known information. Any violation is considered malpractice.
Tax return preparers have obligations to represent their taxpayer clients rather than serve the interests of the IRS. However, honest taxpayers share the same objective as the IRS. Furthermore, the goals of a professional with a tax preparer license are aligned with any taxpayer who wants an accurate return and no IRS trouble.
The only difficulty for paid tax preparers is clients who want their tax returns manipulated to increase the refund. Tax practitioners should refuse service to these individuals.
Otherwise, licensed tax practitioners should not fear that OPR will conscript them to perform partial audits of taxpayer records. Although OPR has aimed slightly in this direction, Circular 230 only mandates reasonable acts to assure tax return accuracy. Consequently, tax return preparers may still rely upon mere statements from clients that appear accurate. However, a sound procedure for every tax practice is maintaining detailed notes about discussion with clients whereupon income and expenses are revealed.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.
المشاركات
0 التعليقات
إرسال تعليق