What Makes a Tax Preparer?
Here we look at who is a tax preparer under the Proposed Regulations. In broad terms, a tax preparer is any person who prepares for compensation, or employs one or more persons to prepare for compensation, all or a “substantial portion” of any return or tax or any claim for refund. The Proposed Regulations break out the concept of tax preparers into the category of “signing tax preparer” and “non-signing tax preparer”. A signing tax return preparer is any tax return preparer who signs or who is required to sign a return or claim for refund pursuant to IRC 6695. So far so good. Everyone who prepares tax returns knows whether he or she is a signing tax preparer. The trick is that penalties can now be imposed on persons who fall within the ambit of tax advisors, rather than tax preparers. Under the Proposed Regulations, a “non-signing tax preparer” is subject to the preparer penalties. A non-signing preparer is someone who gives advice regarding all or a substantial portion of a return or
