IRS Preparer Penalties
The IRS has imposed new regulations on complaince for tax preparers with stiff consequences for violations, even if they are unintentional.
Code section 6695(g) is one of the few laws that imposes a penalty on preparers without any regard to the intent to do wrong when preparing a return.
The penalty is currently $520 for each violation of due diligence in preparing returns with Earned Income Tax Credit, Additional Child Tax Credit, and American opportunity credit, with a potential total penalty of $1,560 per return.
BEST PRACTICES
Preparers should ensure they are meeting the due dilgence requirements of knowledge and recordkeeping. Keeping copies of all documents you rely on is crucial.
Properly completing IRS Form 8867, Paid Preparer's Due Diligence Checklist. Are you checking the correct boxes?
PAID PREPARER AUDITS
If you've received an audit notice, there are steps you can take to prepare.
- Review your files ahead of time to determine what documents you've retained. If something is missing, document why.
- Communicate with the agent (you, or your representative)
- Informal Protest
- Formal Protest
Attorney Chelsea Rebeck is a Preparer Penalty Expert. Contact her today at (248) 636-4232
Keywords: 6695(g)