Discussion:Preparer Name Listed on Return
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Discussion Forum Index --> Tax Questions --> Preparer Name Listed on Return
| 7 January 2008 | |
| Hi all. Long time lurker first time poster. I work in a rather large tax office and a question was recently raised as to whose name must be listed on the Preparer's Signature line. In my prior office the principal would put his name on every return that left the office. The way the current office does this is the person that did the main prep work is the one listed. My current understanding is that the last Circular 230 professional to review the return must have their name listed. Is this correct? What about non-Circular 230 professionals? I would assume the firm name listed on that line as well as the Firm Name line would be wholly incorrect? Any thoughts would be nice. I just want to get everything straight in my head about the new changes. Thanks! | |
Donniecastleman (talk|edits) said: | 7 January 2008 |
| I work for a firm sometimes and always print and sign my name in the preparer box, but that's just what we worked out, also, if you're putting your name on a return, be sure and get a Preparers Tax ID Number so your social isn't floating around out there on returns. | |
| 7 January 2008 | |
| Depends. I think in the end, it is all about the coverage of E&O insurance. | |
| 7 January 2008 | |
| Everyone has a PTIN so that isn't a problem. But I really do want to know the proper way to do this. If it is acceptable to have the firm name as preparer that would be ideal as there are a multitude of preparers, some 230 some not, but I don't think that would be acceptable by The IRS. I don't think E&O is a problem either way in this case. | |
| 7 January 2008 | |
| I wasn't aware that Circular 230 had any bearing on this particular preparer Reg. If it's unclear within a firm who is the preparer of the returns under the Reg, you're not going to be penalized by IRS, if that's the principal concern. | |
| 7 January 2008 | |
| TxSrv: That is the main concern. A lot of times it is very unclear who is the actual preparer, so it would be nice to have a method to solve that. Also with the new preparer penalties, people are concerned about their names being on returns. I think the new penalties are just a big scare and that unless you are really doing something knowingly wrong or illegal they won't effect you. However there are people that don't feel that way. Anyone have thoughts? | |
| 7 January 2008 | |
| [Treasury Regulations, Subchapter A, Sec. 1.6695-1]
"Example 2. X partnership is a national accounting firm which prepares for compensation returns and claims for refund of taxes. A and B, employees of X, are involved in preparing the tax return of T Corporation. After they complete the return, including the gathering of the necessary information, the proper application of the tax laws to such information, and the performance of the necessary mathematical computations, C, a supervisory employee of X, reviews the return. As part of this review, C reviews the information provided and the application of the tax laws to this information. The mathematical computations and carried-forward amounts are proved by D, an employee of X's comparing and proving department. The policies and practices of X require that P, a partner, finally review the return. The scope of P's review includes reviewing the information provided by applying to this information his knowledge of T's affairs, observing that X's policies and practices have been followed, and making the final determination with respect to the proper application of the tax laws to determine T's tax liability. P may or may not exercise these responsibilities, or may exercise them to a greater or lesser extent, depending on the degree of complexity of the return, his confidence in C (or A and B), and other factors. P is the individual preparer who is primarily responsible for the overall accuracy of T's return. P must sign the return as preparer. there are sevral other examples. TexCPA 17:27, 7 January 2008 (CST) | |
TheTinCook (talk|edits) said: | 8 January 2008 |
| JMalina-
There can easily be more then one preparer for a return. The issue here is who signs the return which is a seperate issue from who is a preparer for any particular return, and as TexCPA cited, the primary preparer must sign the return. Not signing a return as a paid preparer doesn't grant you immunity from the preparer penalties. Anybody who works on a "substantial" part of information (depreciation schedules, k-1's, etc) that gets included in the return can be counted as a preparer for the return, and you can get penalized if you screw up. | |
| 8 January 2008 | |
| Who signed the return, if anybody even did, does not estop IRS from applying the conduct penalty on a return to the actual preparer. Therefore, it wasn't true when I worked there, and unlikely true today, that there's any compliance issue should the wrong person within a firm sign returns, unless the firm's returns got many understated tax problems which can be pegged on the preparer. To investigate solely a identification penalty issue requires field staffing diverted from something else which makes real money.
How would IRS know to even initiate such a preparer investigation? It would have to be an informant, and such informant would have to know the signer of the returns within that firm is clearly the wrong person under the Regs and Rulings. | |
