Today’s tax law makes your tax return preparer a participant in tax law compliance. This means you can’t expect your tax preparer to take your numbers and simply slap them willy-nilly into your tax return.
The IRS can impose a penalty on your tax return preparer for the following:
Failing to do certain administrative tasks
Negotiating your tax refund check
Neglecting due diligence requirements for certain tax credits
Taking unreasonable tax return positions that lead to an understatement of tax
As a small business owner, you first need to have some idea of what your tax preparer faces so you provide the best information to keep your taxes as low as possible. And second, you need to know what information your preparer requires when he or she does not see a tax deduction as you do.
In this article, we explain the penalties your preparer faces, how those penalties can affect your taxes, the potential cost of the penalties to your tax return preparer, and how your preparer can fight the penalties. ... Log in to view full article.