Highlights of CCH Seminar: Preparer penalties; Circular 230; 2009 filing season
Hot issues and areas where practitioners may be affected by changes made to the preparer penalty provisions in Section 6694 in the recently enacted Emergency Economic Stabilization Act (EESA) bailout bill were outlined and discussed in a recent CCH audio seminar. They include:
- Who is a preparer, and liability of firm
- The new preparer confidence threshholds
- Income tax disclosure requirements
- How this change integrates with Treasury Department Circular 230
- Disclosure requirements for other returns and pass-through entities
- Obligations with regard to foreign bank account reporting (FBAR)
- The new Section 7216 requirements which take effect on January 1, 2009, and
- Other Circular 230 requirements
The bailout bill changed the tax preparer's confidence threshold in Code Section 6694 for income tax positions from "more likely than not" to "substantial authority" for positions on income tax returns, the same threshold required for the taxpayer. This seminar defines who is a preparer, reviews standards for disclosure and use of Form 8275 for signing and non-signing professionals, gives guidance for when discussion with the taxpayer is sufficient, and identifies areas where the IRS may need to rewrite their guidance.
The seminar covered who is liable for a penalty for understatement and the 2007 Small Business Act specific rules for penalties. Recommendations were presented for steps preparers can take to meet the FBAR requirement in the absence of clear guidance. The seminar content refers to new Section 7216 rules for documentation of consents the preparer must obtain and prohibition of disclosure of Social Security numbers to preparers outside of the United States.
Other Circular 230 provisions practitioners should be aware of relate to:
- Timeliness of examination and "tax season"
- Conflict of interest waivers
- Knowledge of omission and duty to inform the taxpayer
The presenter, Arthur J. (Kip) Dellinger, Jr. CPA, is a senior tax partner at Kallman and Co., LLP in Los Angeles and chair of the AICPA Tax Division's Tax Practice Responsibilities Committee. Dellinger is the author of numerous books and articles including Practical Guide to Federal Tax Practice Standards published by CCH.
About CCH Audio Seminars
You can train your staff with the power of CCH audio seminars. CCH audio seminar events are live and interactive with opportunities to ask the presenter(s) your questions. The audio is delivered directly to you over the telephone to provide clear, reliable sound quality. Some events also include a web component. Invite as many people as you wish to attend at your location. For large groups, use a speakerphone to deliver the audio and a projection system to deliver the Web component.
You can view the list of upcoming CCH Audio Seminars .