The Issue Of Tax Preparers

-Certified Public Accountant is the highest level for a tax professional. There are many bookkeepers and accountants, but only a small percentage of them are CPAs. Regular accountants and bookkeepers, regardless of how nice and pleasant they may be, can not, for example, represent the client with IRS, should any problem occur. Since many of the clients are successful

Someone might do that if they are handicapped, or if they don't understand enough about their return and wouldn't feel comfortable talking to the IRS, etc. or want their son/daughter/parent/attorney/friend/whatever to be able to discuss it with the IRS, or want their accountant to handle all communications for them, etc.

Since we had been doing business with her for over 12 years, we felt that she would receive all the proper training, and we never doubted her skills. Then within the last couple of years, we started detecting our income tax returns would take longer, not knowing why, so we would

Normally the Internal Revenue Service conducts audits to a significant percentage of taxpaying citizens each year, this audits are perform to verify certain variances within the tax law and codes. The individual being audited does have a burden on

Code Summary: Code Section 7525 discusses the rights of confidentiality that a taxpayer would have between his or her tax practitioner that is a federally authorized tax practitioner. In order to be a federally authorized tax practitioner, the practitioner must be authorized to practice before the Internal Revenue Service. The code section states that the communication between the taxpayer and the tax practitioner with respect to tax advice is protected under the same confidentiality protections that would exist between a taxpayer and an attorney. Some exceptions to this confidentiality do exist however. A taxpayer and tax practitioner are not protected if the details of the communication involve tax shelters, which is an investment strategy

Tax Law Books- IRS agents must have prior experience with the various tax laws. However, a tax book will be used extensively due to the vast amount of laws. Books will also be used to support claims of fraudulent behavior.

Will provide complete and accurate income documents and other information for the preparation of the tax returns. We agree to file an amended return for an additional fee should we discover that information provided was incomplete or inaccurate.

Statements on Standards for Tax Services No.1 addresses a member’s obligation to advise a taxpayer of their work. This statement also summarizes forth the applicable standards for members when recommending tax position or prepare tax return. A tax return position means a position that a practitioner uses his or her knowledge of all the materials and facts to provide tax service to a taxpayer. What’s more, there are more specific reporting and disclosure standards for tax preparers which a member should determine and comply. If there are no written standards with respect to recommending a tax return position or preparing or signing a tax return, or if its standards are lower than other standards, a member shouldn’t recommend a tax return position or

Enrolled Agent is a title given to those who are federally licensed tax practitioners. They are those who represents the taxpayer before the Internal Revenue Service (IRS). They are experts and very intelligent in the taxation area. Enrolled Agents duties range from preparing tax returns, to representing clients in audits cases, collections and appeals. The Enrolled Agent title comes with many education or exams, qualifications, experience and a certain level of ethics. The Virginia Society of Enrolled Agent (n.d) website states:

The commissioner is responsible for establishing all required offices within the Internal Revenue Service necessary to enforce these rules. This includes the Office of Professional Responsibility, an office responsible for disciplinary actions, as well as an administrative office to handle applications in addition to continuing education and competency testing. In order for an attorney to practice, they must not currently be under suspension or disbarment and file a written declaration with the IRS saying they are qualified to represent the party/parties. Similarly, Certified Public Accountants (CPAs) must also be free from suspension or disbarment and submit a written declaration saying they are qualified to represent the parties. Enrolled agents must just simply be free of suspension and disbarment, but are not required to submit any declaration. Practicing as an enrolled actuary is subject to the same rules as attorneys and CPAs, but is limited to representing issues within title 26 of the United States code (mostly related to employer contribution funds and taxing on those plans). Likewise, Enrolled Retirement Plan Agents are also subject to the same rules as attorneys and CPAs, but are limited to issues related to employee retirement plans and the taxing related to them. A Registered Tax Preparer also follows the same rules, but is limited to preparing tax returns and other documentation to be sent to the IRS. Tax preparers are restricted from giving tax

Assist in gathering data and analyzing information for preparation and completion of annual federal and state income and franchise tax returns including quarterly federal and state estimated payments as well as extensions

As stated in Internal Revenue Code 6694, a tax preparer who prepares a tax return or claims a refund that includes an understatement of liability due to an unreasonable position is liable for a penalty if the tax preparer knew or reasonably should have known of the understatement. The penalty is the greater of $1,000 or 50% of the income the preparer earned regarding the return or claim. The penalty increases to the greater of $5,000 or 50% of the revenue if the understatement or refund request is due to willful or reckless conduct (Taxes: Applying the Understatement Penalty). The focus of the penalty provisions was to address perceived fraudulent and abusive behavior due to individual income tax preparers and to attempt to reduce this perceived widespread abuse by passing the punishment on to the signing tax preparer.

If you get a professional tax preparer that you can trust, filing tax returns in the future will be an easy process. By working with them, they will have a clear understanding of your tax situation. You can call them or talk to them anytime you find yourself struggling with tax penalties, back taxes. They can also offer you valuable advice when you are dealing with the IRS. The tax preparer should be like a trusted advisor that you can rely on any time you need help that

The following individuals are authorized personnel to practice before the Internal Revenue Service: attorneys, certified public accountants, enrolled agents, enrolled actuaries, and enrolled retirement plan agents. These personnel are subject to the regulations in the circular. The enrolled agents and retirement plan agents are subject to approval by the internal revenue service. Attorneys and Certified Public Accountants should be individuals who are not under suspension or discharge from practice.

The individual income tax is complicated, and it violates transparency standards through created loopholes (or tax preferences) which allow some to pay less than their fair share of taxes (Mikesell, 2011). In 2005, more than 70 percent of individuals filing taxes had tax preparers complete their returns because of confusing rules and regulations that could penalize taxpayers for qualifying for certain legal tax preferences (Mikesell, 2011). This transparency problem exists because citizens are really unaware of how to determine their tax liability except at the end of the year. Income taxes are collected annually through the Internal Revenue Service (IRS), and there are constant complaints about the IRS not willing to assist taxpayers