Question

What are ethical considerations related to tax preparations involving partnerships?

Answer 1

Every professional needs to consider and follow certain standards of conduct of the given profession.Similar is the case with the tax professionals or the tax preparers wh must comply with the legal requirements as well as the rules found in the IRC and the treasury department circular 230.If the tax preparers considers and practice the ethical standards as mentioned in circular 230 it could lead to less litigations.less confronations with the IRS.This Treasury department Circular 230 contains the rules and regulations that a tax preparer must practice when representing the client before the Internal Revenue Service.

The ethical considerations related to tax preparation involving partnerships are as follows:

1. Excercise due diligence and inform the client of any error, omissions,non compliance in the clients return and also its consequences.

2.Provide prompt and accurate information to the IRS under authorized request.

3.The tax preparer cannot be the tax preparer and authenticate/notarize the tax documents for which he has an interest.

4.The tax preparer should not sign the return that do not have reasonable basis for preparation.

5.The tax preparer should not sign the return that contains intentional disregards of IRS rules and regulations,contain an unreasonable or frivolous position.Any attempt to advance these positions by the tax preparers will be liable to penalty.

6.The tax preparer should not charge unconscionable(excessive or unreasonable) fees.

7.The tax preparer should not charge contingent fees.The fees should be fixed and not contigent. example:fees charged as percentage of tax payers refund.

8.The preparer should not willfully mislead ,defraud or threaten the client or prepare a tax return without possessing a valid PTIN.

9.The tax preparer should not withhold the clients records beyond the scope allowed by the aplicable state laws.