Ethics Flashcards
What is the IN rule?
Inquire if info looks incorrect, incomplete, or inconsistent.
Probability of success if challenged?
More Likely Than Not-Tax Shelters >50%
Substantial Authority-Undisclosed Positions ~40%
Realistic Possibility SSTS #1 33%
Reasonable Basis- Disclosed Positions ~20%Frivolous=don’t go there.
What is the PANE rule?
Permission, Advise, Notify, Error
Are Circular 230 Best Practices mandatory?
No, they are aspirational best practices.
Sanctions mean?
Penalty for disobeying a law.
Who is considered a tax return preparer?
Preparers include compensated parties such as CPA’s, attorneys, and enrolled agents that prepare and sign entire returns and also parties providing advice for substantial portion of the return, even if that party did not sign the return.
Who is not a tax return preparer?
Volunteers, preparing a return for a family member, relative or neighbor for free, performing only clerical services such as copying or typing, fiduciary for a trust, employee who prepares employer’s return.
How many years is the preparer required to keep the return?
Keep a copy of the actual return or a list of returns with specified info (taxpayer name and ID, tax year, type of return, etc), for 3 years.
When is consent required if outsourcing?
Consent is required if outsourcing to another firm, which may include off shoring the data outside the US, TP must consent in writing which is good for 1 year.
What is the responsibility of the Tax preparer with documents the TP gives?
Need not verify, review or examine info that TP provides. Just inquire if info is incomplete, incorrect, or inconsistent.
Client records should remain confidential unless…
Court order or quality or peer review.
Avoid contingent fees unless…
connected to examination or judicial proceeding.
When can a tax preparer endorse TP refund check?
NEVER. Hands off the refund check.
