Tax Return Preparer Penalites

As a tax return preparer, you know that the IRS takes your job seriously.  But you may not be aware of just how serious.  The IRS can level penalties against you for a huge number of infractions of professional preparer conduct.  The IRS can open a Program Action Case against you if it sees a pattern of inappropriate services that appear pervasive and extend to multiple taxpayers.  For instance, if the IRS suspects that you repeatedly understated the amount of taxes owed by taxpayers, made deliberate and willful attempts to hide the true amount owed by taxpayers,  or engaged in reckless and intentional disregard of IRS rules and regulations, the IRS will investigate your behavior. In some cases, you may face penalties, or you may be censured, including suspension or disbarment, by the IRS Office of Professional Responsibility. You may even incur criminal charges.

Any one of these mistakes – and others – can trigger an IRS examination of your history as a tax return preparer:

  • Breach of client confidentiality.
  • Failure to sign a return as the preparer.
  • Inadequate record retention, including client contact information and copies of the completed returns.
  • Failure to furnish a taxpayer ID number.
  • Failure to engage in service with due diligence to accurate reporting.
  • And aiding and abetting the understatement of taxes owed.

If you are facing an IRS inquiry or audit concerning your tax preparation services, consulting with us can help save your career.  Although you are most likely very well versed in reporting requirements, you may not know all your rights and responsibilities to the IRS as a tax return preparer.

As a tax boutique, Law Offices of Christy Lee, P.C., offers a full array of services for the tax return preparer.  We will advise you about your options in a civil audit, appear for you at any hearings, and defend you if you face criminal charges for unprofessional and unethical return preparation.  We will also confer with you concerning the best ways to avoid triggering civil audits in the future.