1.3 Tax return preparers

Question 1

Tax Return Preparers

Answer 1

Any person that prepares for compensation or employs one or more to prepare returns for compensation all or a substantial portion of a return of tax or claim for refund

Question 2

Tax Return Position

Answer 2

Significant aspects of return preparation are making factual inquiries and taking a positive relative to tax law

Question 3

Procedural Requirements

Answer 3

Retain a completed copy of return 3 years after the close of the return period
Alternatively,
a) taxpayers name
b) Tax ID
c) Their tax years
d) Types of returns prepared
The return period is the 12-month period beginning on July 1 each year

Question 4

Penalties

Answer 4

No substantial authority = penalty is the greater of $1000 or 50% of the income to be derived
Understatement due to willful or reckless conduct = penalty is the greater of $5000 or 50% of the income to be derived

Question 5

Disclosure of Taxpayer Information

Answer 5

A) penalty - @250 per disclosure, $10000 max per year
B) exceptions
C) consent
D) confidentiality