Video: Tax Preparer Regulations

In this lesson, unravel the maze of regulations that govern tax preparers with the guidance of Nick Palazzolo, CPA. Dive into the key responsibilities of tax preparers, the significance of retaining tax return copies, and providing these copies to clients promptly. Understand the delicate balance of adhering to regulations while avoiding costly penalties for non-compliance, such as the specific fines for failing to provide copies, withholding preparer identification numbers, or neglecting to sign returns. Discover the conditions under which a preparer can steer clear of penalties in the case of honest mistakes, and the vital importance of maintaining client confidentiality. Nick makes sure to emphasize the most important points to remember, with the occasional humorous reminder that staying in the IRS's good graces is a goal for every savvy tax preparer.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Miscellaneous tax preparer regulations. Don't you all worry? We are almost done. We got a few more slides and we'll be done and call it a day. Tax return preparers have various responsibilities and penalties can be assessed by the IRS. I never heard of that before. That's why I messed it up. I've never heard of the, what is the IRS? For failure to comply with certain requirements. However, no tax preparer penalty is imposed for an understatement of a taxpayer's liability. If the preparer demonstrates reasonable cause for the understatement and acted in good faith. Here are some examples of these preparer penalties. Failure to retain a completed copy of a taxpayer client's tax return. Now tax preparers must retain a completed copy or a list with the name and the tax identification number. So usually social security number of each return prepared for three years after the close of the return period, the penalty for failure to do so is $55 per instance. You'll see some of these things we saw before some instances like these, but also make sure you're understanding these $55 amounts. Failure to provide a copy of a client of a tax return to the taxpayer client. Tax preparers must also provide a copy of the tax return to the taxpayer client no later than when the return is presented for the taxpayer's signature. We can see an IRC penalty assessed here for failure to comply in this matter. Next failure to furnish the tax preparer's tax identification number. Tax preparers must include their tax identification number on tax returns prepared for their clients. So that's your P10. Failure to do so can result in an IRC penalty. And lastly here, failure to sign a tax return, furnish the ID number of the

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Ethics and Responsibilities in Tax Practice

Module: 2 Concepts, 33 Videos

Internal Revenue Code and Tax Return Preparation Regulations Overview

4:17

Introduction to Internal Revenue Code and Tax Return Preparation Regulations

5:20

IRS Tax Forms

5:40

Types of Federal Taxes