Why Tax Professionals Need Tax Preparer Defense
We all make mistakes as human beings. But when your job is to help people prepare their taxes, there is no margin for error. Even the most experienced and skilled accountant, CPA or H&R Block employee can make mistakes. When these errors occur, it can result in tax audits and IRS penalties against a client. Each year, countless people receive notifications from the IRS concerning a past tax return. Many of these audits and tax issues were the result of mistakes made by the tax preparer. If a tax professional is being investigated by the IRS, it is critical for them to seek representation from a tax preparer lawyer.
It is not uncommon for tax preparers to receive inquiries from the IRS. If you are a CPA or tax professional, it may be tempting to try working out IRS problems on your own. But if you are accused of violating IRS ethical guidelines, you could be facing harsh penalties. A tax preparer attorney can protect the rights of clients to reduce the chances of being disbarred and resolving the issue.
Do you know about Circular 230?
The IRS has many regulations and statutes concerning the ethical practices of tax preparers. One of the most important is Circular 230. It gives the Secretary of Treasury the authority to suspend, censure and even disbar a tax preparer that is found guilty of the following violations:
- Intentionally misleading a client with their tax returns
- Disrupting the preparation of tax returns
- Gross incompetence
Sometimes there can be a fine line separating these serious violations from simple and unintentional human errors. Here are some common mistakes that can get a tax preparer into trouble:
- Failure to sign a return
- Failure to furnish a tax identification number
- Failure to provide a copy of the tax return to the client
- Failure to retain a copy of the client’s tax return
Although tax preparers are generally far more knowledgeable about tax law than the average person, it is vital for them to seek legal representation and counsel from a tax lawyer when facing an IRS investigation. Unlawful conduct by a tax preparer can be punishable with up to three years in prison. There is no reason to lose your freedom over mistakes.
The IRS is cracking down on tax preparer violations. Prior to 2008, the penalties against unethical tax preparers remained unchanged since the 1970s. The Work Opportunity Tax Act of 2008 has changed several provisions in federal tax codes. Tax preparers cannot take chances. Take the time to familiarize yourself with these provisions.
Timing is everything. Tax professionals must take swift action when facing IRS penalties. Failure to comply with the IRS in a timely manner can severely affect your case. Tax preparer lawyers are highly-skilled negotiators that can deal with the IRS on your behalf. When your job and freedom are on the line, never procrastinate or try to battle the IRS on your own. Contact a tax preparer lawyer immediately.