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IRS site visits may result tax preparer fines

In our last post we discussed the return preparer letter that the IRS sent to approximately 21,000 tax preparers in California and across the nation. The intention of the letter is not only to heighten the awareness of taxpayers of the consequences of preparing inaccurate returns but also to inform those who received the letter that they may be selected for a visit by an IRS representative. The visits will begin this month and are meant to confirm compliance with the IRS' return preparer requirements.

The IRS has stated that it will focus on those tax return preparers that have prepared a large number of tax returns during the 2011 filing season. Specifically preparers who prepared many individual tax returns with Schedules A, C, or E during last year's tax season may receive visits from the IRS. The IRS believes that these returns may be riddled with errors and provide the basis for tax preparer penalties.

During the site visits the IRS plans to provide information to tax preparers on the new tax return preparer requirements for the 2012 filing season and confirm that tax preparers are fulfilling their obligations to maintain records, among other things.

The IRS has decided to conduct the visits during the busiest time of the tax year because that is the time when most tax professionals maintain regular business hours. The IRS also hopes to help inform tax preparers on their obligations to improve the 2012 filings before the end of the tax season so that tax preparers can avoid making preventable mistakes.

Those who are selected for a visit will receive a call by the IRS. The visit will take place at a tax preparer's place of business and the IRS will request that the tax preparer has all documentation regarding the 2011 tax returns that he or she prepared. The IRS has also suggested that it will not hesitate to fine preparers that fail to meet their obligations under the IRC.

Source: IRS.gov, "IRS Letters and Visits to Return Preparers - FAQs Filing Season 2012."

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