What you should know about a tax preparer’s legal obligations

Posted on Posted in Small Business

Every paid tax preparer is subject to five simple legal obligations:

  1. Must notify you of any observed tax non-compliance.
  2. Must exercise due diligence in ascertaining the truth and accuracy of information reported.
  3. Must safeguard taxpayer information and keep it private
  4. Must provide information to the IRS on request
  5. Is subject to preparer penalties for violations of the requirements above.

Taxpayers should note that there is no obligation to notify the IRS on any matter and professional standards prevent a preparer from doing so. There is no legal requirement to notify you of ways to reduce your tax liability even though some preparers (CPAs in particular) may consider this to be their primary function in the tax return preparation process. The rules for CPAs and attorneys may vary with regard to the requirement to respond to IRS requests for information. More information about all of these is available in IRS Circular 230.

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