Each year, the Internal Revenue Service (IRS) issues a list of "Dirty Dozen" tax scams that can affect taxpayers. The IRS publishes the list in order to educate taxpayers about the need to protect financial information and use common sense when it comes to filing tax returns.
On January 28, 2013, in Loving v. IRS, the U.S. District Court for the District of Columbia found in favor of Sabina Loving and two other plaintiffs who challenged the Internal Revenue Service's (IRS) ability to govern tax return preparers pursuant to regulations issued in 2011. The 2011 regulations required, in part, registration with the IRS and use of a registration number when preparing returns known as the Preparer Tax Identification Number (PTIN).
Every individual wants to get the most deductions and credits from their tax returns. These tax issues can save individuals a substantial amount of money and, in some cases, can result in the individual receiving a healthy check from the IRS. However, despite the desire to receive these benefits, individuals and tax professionals are under an obligation to provide accurate information to the IRS, information which, if falsified, can lead to tax crimes being filed against them in a California criminal court.
Tax audits can be time and money consuming, as well as frustrating for all parties involved. In a previous post, we gave California small business owners some tips on responding to tax audits. In today's post, we discuss measures that may help small business owners avoid an audit in the first place.
The IRS is using California law as a model for new education requirements for tax preparers. The new requirements will go into effect in 2012, their purpose being to prevent tax fraud and protect taxpayers from bad decisions on the part of preparers.
The IRS announced today the new test tax return preparers will be required to pass in order to obtain a Preparer Tax Identification Number (PTIN). Preparers have until December 31, 2013 to pass the test.