IRS Issues new Preparer Rules

In 1998 the IRS issued proposed regulations regarding the retention of preparer-signed tax documents. Those proposed regulations have been withdrawn, effective July 18, 2000, and replaced with final regulations. Effective immediately, tax preparers have two methods for retaining preparer signatures on tax returns or claims that are electronically filed:

The preparer (or the preparer’s firm) can keep an originally-signed tax return or claim, or

The preparer (or the preparer’s firm) can keep a photocopy of the signed return or can use an electronic storage system to retain a copy of the preparer-signed return. Requirements set out in Revenue Procedure 97-22 describe the accepted method for electronic storage of documents.

The new Treasury Regulation is Section 1.6695.1.