IRS Scrutinizes High Risk Tax Preparers


As new regulations for tax preparers go into full swing, the IRS is preparing to put those it regards as ‘high risk’ tax preparers under the radar. At a conference sponsored by the American Institute of Certified Public Accountants in Washington, IRS Commissioner Doug Shulman said, “Beginning soon, the IRS will send letters to tax-return preparers who have been identified as high risk. The letters are intended to bring to these return preparers’ attention that we’ve noticed some “questionable traits” on some of their returns.”

At the same time, Shulman said the IRS is going to step up visits to tax preparers with egregious error rates and review earned-income tax credit claims more closely. “We will conduct in-person visits with EITC return preparers to discuss due diligence requirements, assessing penalties against those who are found to be noncompliant,” said Shulman. This shows the IRS is bent on making sure taxpayers do not take advantage of easy pickings from the tax code such as the earned-income tax credit.

In May, the Treasury Department reported to the House Way and Means Subcommittee that the government may have lost between $11 billion and $13 billion every year through erroneously paid earned-income tax payments.

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