Tax Return Preparer

A professional who is compensated for preparing, assisting in preparing, or reviewing tax returns. They must sign the tax returns they handle.
On this page

Definition

A tax return preparer is anyone who, for compensation, prepares, assists in the preparation, or reviews a tax return. This individual is responsible for ensuring that the tax returns are accurately completed and must attest to their accuracy by signing the returns they handle.

Examples

  1. Certified Public Accountant (CPA): A CPA might assist in preparing a complex business tax return.
  2. Enrolled Agent (EA): An EA may help an individual to prepare their personal income tax return.
  3. Tax Attorney: A tax attorney could review and amend a taxpayer’s return to ensure compliance with current laws.
  4. Volunteer Income Tax Assistance (VITA) volunteer: While VITA volunteers typically do not receive compensation, they do fit the role of tax return preparers by assisting low-income individuals with their tax returns.

Frequently Asked Questions (FAQs)

1. What qualifications are required to become a tax return preparer?

To become a tax return preparer, one may need a certification like CPA, EA, or other relevant professional credentials. Additionally, registration with the IRS might be required, along with passing any necessary examinations.

2. Are tax return preparers required to have specific training?

Yes, many tax return preparers are required to undergo training, particularly those who handle complex returns. Continuing education is also often necessary to stay updated on tax law changes.

3. Are all paid tax return preparers required to provide their PTIN?

Yes, all paid tax return preparers must obtain and include their Preparer Tax Identification Number (PTIN) on every tax return they complete.

4. What are the risks of using an unpaid preparer?

Using an unpaid preparer may increase the risk of errors and omissions on your tax return. It is often more secure to employ a qualified and regulated paid preparer.

5. What happens if a tax return preparer makes a mistake?

If a mistake is found, the taxpayer is still responsible for paying any additional tax due, along with potential penalties and interest. However, there may be recourse against the preparer for negligence.

  • Certified Public Accountant (CPA): A professional accountant who has passed the CPA exam and obtained licensure from a state board of accountancy.
  • Enrolled Agent (EA): A federally authorized tax practitioner empowered by the U.S. Department of the Treasury to represent taxpayers before the IRS.
  • Preparer Tax Identification Number (PTIN): An identification number that all paid tax preparers must use on U.S. federal tax returns or claims for refund.
  • Volunteer Income Tax Assistance (VITA): A program offering free tax help to people who generally make $57,000 or less, persons with disabilities, and limited English-speaking taxpayers.

References

Suggested Books for Further Studies

  • “J.K. Lasser’s Your Income Tax Professional Edition” by J.K. Lasser
  • “Tax Preparation & Planning for Freelancers & Entrepreneurs” by Alegra Loewenstein
  • “The Income Tax Guide for Americans” by Kareem F. Hagman

Fundamentals of Tax Return Preparers: Taxation Basics Quiz

Loading quiz…

Thank you for exploring the role of a tax return preparer with us and for engaging with our quizzes. Maintain your pursuit of knowledge in the ever-evolving field of taxation!

Tax Roll
Tax Return