IRS Code 1986

Question 1

Define TRP (tax return preparer)

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

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

Answer 2

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.

Question 3

List “unreasonable positions”

Answer 3

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