Preparer Penalty Defense

        

Call us at 1.888.317.4489

Up until 2008, regulations governing tax return preparer penalties had remained largely unchanged since the 1970s. It wasn't until the Small Business and Work Opportunity Tax Act of 2008 that several provisions of the Code were amended. One of the largest changes was language that extended income tax return preparer penalties to all tax return preparers. Contrary to what many may think, the IRS isn't out to make the lives of tax preparers miserable with countless rules and regulations governing their business. They do realize that the majority of tax return preparers and practitioners are ethical, honest, and in business to serve their clients best interests by preparing a complete and accurate tax return. However, in the event a preparer’s ethical compass goes awry, the IRS will step in to dole out a few penalties. There are both civil and criminal penalties that apply to a tax preparer’s preparation of tax returns. Either can be avoided if preparers are properly informed of the new IRS rules as they pertain to revised standards of tax return preparation established by the IRS in 2011.

We have successfully negotiated penalty reductions of up to 72%...

Here is a list of the most relevant penalties....

IRC Sec. 6694(a) - Understatement of taxpayer liability due to unrealistic positions. Penalty: $1000 for each return or claim.

IRC Sec. 6694(b) - Willful, intentional or reckless conduct leading to understatement. Penalty: The greater of $5000 or 50% of the income derived (or to be derived) by the tax‐return preparer, less any penalty paid under 6694(a).

IRC Sec. 6695(a) - Failure to furnish taxpayer a copy of the return are claimed by the time such return or claim is presented to the taxpayer for signature. Penalty: $50 penalty for each return, not to exceed $25,000 during any calendar year.

IRC Sec. 6695(b) - Preparer fails to sign a return or claim. Penalty: $50 penalty for each return, not to exceed $25,000 during any calendar year.

IRC. Sec. 6695(c) - Preparer fails to provide taxpayer identification number. Penalty: $50 penalty for each return, not to exceed $25,000 during any calendar year.

IRC. Sec. 6695(d) - Preparer fails to keep a copy/list of returns are claims prepared, for the
period of three years after the close of the return period. Penalty: $50 penalty for each return, not to exceed $25,000 during any calendar year.

IRC. Sec. 6695(e) - Failure to comply with the requirements of Section 60604 maintaining
information on all preparers employed during a return period. Penalty: $50 penalty for each return, not to exceed $25,000 during any calendar year.


IRS Sec. 6695(f) - Negotiating or endorsing a federal income tax check issued to a taxpayer. Penalty: $500 penalty for each check

IRC Sec. 6695(g) - Failure to meet due diligence requirements. Penalty: $500 penalty per failure.

IRC Sec. 6700 - Promoting abusive tax shelters. Penalty: $1000 penalty per activity or (if less) 100% of gross income from each activity.

IRC Sec. 6701 - Aiding and abetting an understatement of tax liability. Penalty: $10,000 per taxpayer per taxable year.

IRC Sec. 6713 - Improper disclosure of information furnished to a preparer in connection with the preparation of federal returns. Civil penalty: $250 for each such disclosure, not to exceed $10,000 per calendar year.

IRC Sec. 7216 - Improper disclosure of information furnished to a preparing connection with the preparation of federal returns reckless and knowing disclosure except as otherwise provided by law. Penalty: Criminal fine ‐ $1000, imprisonment for not more than one year, or both, plus cost of prosecution.


IRC Sec. 7207 - Willful delivery or disclosure of fraudulent documentation to the IRS. Penalty: Criminal fine of $10,000, imprisonment for not more than one year, or both, plus cost of prosecution.

IRC Sec. 7212 Interference with the administration of the IRC. Penalty: Criminal fine of $5000, imprisonment for not more than three years, or both, plus cost of prosecution.

IRC Sec. 7407(b) - Misrepresentation of experience, education or eligibility to practice;
guaranteeing payment of refund; other fraudulent or deceptive conduct, conduct subject to penalty under Sections 6694 and 6695 or criminal penalty under IRC. Penalty: Court action to stop conduct of preparer. Action to stop preparer from acting as a paid preparer for repeated violations.

Call us at 1.888.317.4489 if you've been penalized...we can help!

Fee: $195 USD per hour

We will to listen to a brief self-assessment of your case at no charge then a minimum fee payment is required. 


For further information, please contact michaeljerome.stuart@aya.yale.edu or call 1.888.317.4489

               Call us at 1.888.317.4489                        

To inquiry about our conference schedules, programs, ABA law school tax certification, forums and enrollment criteria, please write to michaeljerome.stuart@aya.yale.edu or telephone our Call Center at 1.203.216.5710. We offer scholarship assistance to high school seniors and college students who demonstrate an interest in preparing for a career as a Tax Preparer, IRS Special Enrolled Agent, or United States Tax Court Practitioner.

We also provide financial assistance to those preparing to be CPAs who have an interest in federal tax practice or practice before the U.S. Tax Court as United States Tax Court Practitioners. Please contact us to discuss the opportunities available at the Tax Law Institute and University of Alabama School of Law Graduate Tax Program. We offer liberal payment plans and many scholastic opportunities.