Question

In your own words, briefly describe some of the rules and penalties that apply to tax practitioners.

Answer 1

Only those taxpayers who fail to meet the applicable standard of care—to do what a reasonable taxpayer would do under the circumstances—can be slapped with negligence penalties and interest.  Positions taken on a return must reach the threshold necessary to avoid a potential penalty, or the client must be informed of the neccessary disclosure action.Tax advisors should continue to provide the best services they can for their clients, including the reduction of taxes when it can be done in an ethical and lawful manner and in the best interests of the client. However, tax preparers and advisors must act in a professional and ethical manner when assisting their clients, and not let the bottom line on their income statement be their primary concern. There are four requirements for a Tax practioner opinion should cover i.e. Must cover Factual Matters, must be relating law to facts, evaluating significant federal tax issues , must make an overall conclusion.