On Wednesday, the IRS issued two revenue rulings (Rev. Ruls. 2010-4 and 2010-5) that provide guidance to tax return preparers on situations in which they will not be liable for civil or criminal penalties under IRC § 7216 for disclosing or using tax return information. IRC § 7216 prohibits a
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Practice Management & Professional Standards
Revised Statements on Standards for Tax Services Take Effect Jan. 1
The AICPA has released revised Statements on Standards for Tax Services (SSTS), whichbecome effective Jan. 1, 2010. The SSTS are enforceable standards of tax practice for AICPA members that address each member’s obligations regarding the following issues: The level of authority needed to recommend a tax return position or
Shulman: ‘Big Shift’ Possible in Preparer Standards, But No Details Yet
IRS Commissioner Douglas Shulman discussed return preparer standards, enforcement in a globalized economy and a new IRS initiative focused on high-wealth individuals’ tax compliance during a speech to the AICPA’s National Tax Conference in Washington on Monday. Return Preparer Oversight In June, Shulman announced during a hearing of the House
The IRS Whistleblower Program: What CPAs Should Know
Since Congress amended IRC § 7623 in 2006, the IRS’ new Whistleblower Office has seen significant interest from potential informants with tips about multimillion-dollar cases of tax noncompliance. In the first 12 months after it was established in February 2007, the Whistleblower Office received 116 reports of underpayments of more
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IRS to Recommend New Tax Preparer Standards The IRS plans before the end of the year to recommend new standards for tax preparers, Commissioner Doug Shulman announced June 5. In testimony before the House Ways and Means Oversight Subcommittee and in a news release, Shulman said he would propose to
IRS Sets Procedures for Tax Return Preparer Penalties
The IRS has issued internal memoranda setting forth procedures for consideration of tax return preparer penalties in taxpayer examinations. A memorandum by the Large and Mid-Size Business Division (LMSB) describes procedures for tax return preparer penalty cases, and two audit technique guideline memos by the Small Business/Self-Employed Division (SB/SE) explain
Strengthening Tax Services’ Foundation
The AICPA’s Statements on Standards for Tax Services (SSTSs) have been updated, clarified and streamlined in proposed revisions now available for study and comment by AICPA members. They can be found on the Tax Division pages of the AICPA Web site at tinyurl.com/5be2rk. The SSTSs are enforceable rules of conduct
Concerns About CPA Letters to Third Parties
A CPA receives a request from a client to provide a letter to the client’s mortgage broker, lender, adoption agency, or other third party. The request seems simple enough and harmless. All the client asks is that the CPA verify that this is her client, that she has been preparing
Accountant Workpaper Privilege Upheld by First Circuit
The U.S. Court of Appeals for the First Circuit on Wednesday upheld a U.S. District Court decision that the work-product privilege applies to certain accountant workpapers (Textron Inc., No. 07-2631 (1st Cir. 1/21/09)), affirming in part, vacating in part, and remanding 507 F. Supp. 2d 138 (D.R.I. 2007). Textron is
IRS Issues Final Preparer Penalty Regs
Editor’s note: This article appears in the February 2009 issue of The Tax Adviser, the AICPA’s monthly journal of tax planning, trends and techniques. The IRS issued final regulations (T.D. 9436) implementing the changes to the Sec. 6694 tax return preparer penalties made by the Small Business and Work
Comments Sought on Revised Statements on Standards for Tax Services
The AICPA released for comment an exposure draft of proposed revisions to Statements on Standards for Tax Services (SSTS). The revisions are intended to address changes in federal and state tax laws and new requirements for providing certain types of tax opinions. SSTS no. 1, Tax Return Positions, has been
2008 In Review: Congressional Impact on CPA Profession
The AICPA enjoyed three legislative victories in Congress this year: equalizing IRS reporting standards for taxpayers and preparers, preventing the Farm Credit System from expanding its pool of borrowers, and maintaining financial and compliance audits for the government-backed Federal Housing Administration (FHA) loan program. “SUBSTANTIAL AUTHORITY” SIGNED INTO LAW OCT.
Highlights
The rescue package, the Emergency Economic Stabilization Act of 2008, allows the Treasury Department to buy up problem assets in an effort to improve the balance sheets of financial institutions and keep credit flowing. The final version of the plan passed by Congress and signed by President Bush on Oct.
IRS Commissioner: Tax Collections Must Be Fair Amid Tough Economic Times
The IRS and tax preparers can reach out to taxpayers hurt by the current economic downturn to help them meet their tax obligations, IRS Commissioner Douglas Shulman told the AICPA National Tax Conference on Oct. 27. (Watch the speech here.) While the Service is mindful that many taxpayers are
Tax Provisions of the Emergency Economic Stabilization Act
Among its many tax provisions, the Emergency Economic Stabilization Act equalized with that of taxpayers the understatement penalty standard tax preparers must observe for undisclosed items. The provision was originally introduced in the House late last year at the urging of the AICPA to fix the problems created by the
A Showcase of Tax Research
In this third installment of “In Practice,” we distill research published in tax and accounting journals that should be of interest to busy tax practitioners. The pervasiveness of tax considerations in the affairs of everyone from students to CEOs makes the field a particularly fertile one for studying financial behavior.
Institute Pushes for Change in Preparer Penalty Standard
Reps. Joe Crowley, D-N.Y., and Jim Ramstad, R-Minn., introduced a bill (HR 4318) in the House to make tax preparers subject to penalties under IRC § 6694 if a position for an undisclosed, non-tax avoidance item lacks substantial authority. A provision in a larger troop funding bill, which was enacted
Return Preparers Subject to New Regulations
Section 7216 of the Internal Revenue Code imposes criminal penalties on tax return preparers who knowingly or recklessly make unauthorized disclosures or uses of information furnished to them in connection with the preparation of an income tax return. Newly finalized regulations should prompt all return preparers to evaluate their processes
Return Preparer Penalties Guidance Issued
The IRS said it will revise regulations before the end of 2008 to incorporate provisions of the Small Business and Work Opportunity Tax Act of 2007 concerning preparer penalties under section 6694 and related sections. In the meantime, interim guidance issued in the final hours of 2007 offered some clarification
Whistleblowers Take Their Cue
In the first year it was established, along with enhanced rewards for tips on large tax underpayments, the IRS Whistleblower Office received about 80 claims, the IRS said in a news release. About half the claims came in the last two-and-a-half months of 2007. They include a claim of $2
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From The Tax Adviser
August 31, 2026
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