Articles Tagged with tax preparer penalties

What Can Cause an Investigation by the Office of Professional Responsibility
The IRS Office of Professional Responsibility (OPR) regulates tax practitioners, including tax lawyers, CPAs, and enrolled agents. OPR has exclusive responsibility for practitioner conduct and sanctions.

Causes of an OPR Investigation

OPR usually does not initiate its own investigations. Cases are referred to OPR when certain tax preparer penalties have been assessed. This makes it critical that tax preparers know how to defend themselves if they are being assessed a tax preparer penalty, because it can result in an OPR referral, which could eventually led to a suspension of practice before the IRS or other serious penalties.

With What IRS Penalties and Charges Can Tax Preparers Be Charged
The IRS can go after professional tax preparers with many different penalties related to filing inaccurate or fraudulent tax returns. Targeting tax preparers allows the IRS to affect a large number of tax returns because each tax preparer can be responsible for completing tax returns for hundreds of taxpayers.

Some of the penalties related to understatement of tax that the IRS can charge tax preparers with include:

IRC § 6694(a) – Understatement due to unreasonable positions.  The penalty is the greater of $1,000 or 50% of the income derived by the tax return preparer with respect to the return or claim for refund.