Tax Return Preparer Flashcards
Who is a tax return preparer?
A person who prepares tax returns or refund claims for compensation or hires others to prepare a substantial part of the return.
Who is considered a tax return preparer?
A person who prepares for compensation, or employs others to prepare for compensation, all or a substantial portion of any tax return or claim for refund under the Internal Revenue Code.
Is professional status required to be a tax return preparer?
No, professional status, educational qualifications, nationality, residence, or business location are not required.
What constitutes a ‘substantial portion’ in tax preparation?
Preparing any significant part of a tax return or claim for refund qualifies a person as a tax return preparer.
What is a signing tax return preparer?
The individual tax return preparer who has primary responsibility for the overall substantive accuracy of the return or claim for refund.
What is a nonsigning tax return preparer?
A tax return preparer who prepares all or a substantial portion of a return or claim for refund but is not the signing tax return preparer.
List one activity that does not make someone a tax return preparer.
Furnishing typing, reproducing, or other mechanical assistance.
Name another activity that does not make someone a tax return preparer.
Providing tax assistance under the Volunteer Income Tax Assistance (VITA) program established by the IRS.
What is a Preparer Tax Identification Number (PTIN)?
A number issued by the IRS to paid tax return preparers, required for preparing federal tax returns.
Who needs a PTIN?
Any individual who, for compensation, prepares all or substantially all of a tax return or claim for refund, including making determinations that affect tax liability.
What must a tax return preparer do with their PTIN annually?
A tax return preparer must renew their PTIN each year before preparing federal tax returns.
What happens if someone prepares or signs a tax return without a valid PTIN?
It is a violation of regulations, which may result in penalties.
What must a paid tax return preparer do when completing a return?
Sign the return (if required) and include their identifying number (PTIN).
What must a preparer provide to the taxpayer?
A copy of the return, no later than the time the original return is presented for signature.
How long must a tax return preparer keep records?
For three years after the close of the return period.
