Good morning to all who are at the Atlanta Tax Forum! I just participated on a Circular 230 panel with Karen Hawkins, Director of the IRS Office of Professional Responsibility.
The panel discussed the issues present in a hypothetical fact pattern developed by Ms. Hawkins and designed to highlight various provisions in the new revision of Circular 230 that will become effective on August 2. If you have not yet read the new Circular 230, you owe it to yourself to do so since it affects – in a very direct way - your duties and responsibilities as a professional tax return preparer. The fact pattern illustrated a tax preparer’s ability to rely (or not!) on another’s work product, in this case a tax organizer, or rely (or clearly not!) on the word of a client who had a variety of tax issues including misstatements, lies and other efforts to convert personal expenses into deductions.
One of the provisions we focused on was the new Section 10.34 (a) in Circular 230. This provision now provides that a tax preparer cannot willfully, recklessly or through gross incompetence sign a tax return containing a position that “lacks a reasonable basis.” Before this provision was included, Circular 230 merely stated a position could not be frivolous. The difference is substance and important because a preparer can be subject to monetary penalties as well as having the right to practice revoked for violating this provision. Since “practice” before the IRS now involves preparing a return, this could mean being out of business.
We will be presenting this discussion in Atlanta again at 1 PM on Wednesday. If you are at the Tax Forum I invite you to the presentation. This panel discussion will also be presented at the other five Tax Forums as well, so if you have not already registered for one of them, you can do so on the NSA website. You can also follow the activities at the Tax Forums on our website just for Forum attendees and others interested:
www.irstaxforum.org
Best regards,
John G. Ams
Executive Vice President
National Society of Accountants
(703) 549-6400 x1313