Internal Revenue Code of 1986 (TRP)

Question 1

Define “tax return preparer (TRP).”

Answer 1

A person who is paid to prepare or retain employees to prepare a substantial portion of any federal tax return or refund claim.

Question 2

List “unreasonable positions.”

Answer 2

• No “substantial authority” (40% chance) for position
• No “reasonable basis” (20% chance) for disclosed position
• Not “more likely than not” (50% chance) for a tax shelter position

Question 3

True or false: A tax return preparer (TRP) can prepare tax forms as a fiduciary.

Answer 3

False. An individual who furnishes typing or other mechanical assistance, prepares forms for his or her employer, or prepares a form as a fiduciary is not classified as a tax preparer.