Standard Federal Tax Explanations related to §6060

FEDERAL INCOME TAX

Information Returns by Return Preparers

Synopsis - information required. -- ... 2008FED ¶36,562.01

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Information Returns by Return Preparers: Synopsis - information required

Tax return preparation is a widespread business and, in an effort to regulate this activity, rules have been promulgated to govern people who prepare tax returns for a fee. The conduct of preparers who prepare returns and refund claims for compensation is regulated through disclosure requirements and ethical standards.

Employers of tax return preparers must retain a record of the name, taxpayer identifying number, and place of work of each return preparer employed during the year (Code Sec. 6060). This record may be in any form, as long as the pertinent information is disclosed. It must be available for inspection upon request by the IRS District Director for three years following the close of the return period to which the record relates. A return period runs from July 1 to the following July 1. Both a partnership and a self-employed person engaged in the preparation of returns are treated as employers and are, therefore, required to keep records.

These rules apply to preparers of all types of tax returns, i.e., income tax, estate tax, gift tax, employment tax, excise tax and exempt organization returns.

Civil penalties are provided for failure to retain and make available applicable records (Code Sec. 6695(e)).