Can a tax return preparer rely upon documentation that hasn’t been verified?
Generally the answer is yes. Both § 10.34(d) of Circular 230 and Treasury Regulation § 1.6694-1(e)(1) provide, in part, that a tax return preparer generally may rely in good faith without verification upon information furnished by a taxpayer. A tax return preparer also may rely in good faith and without verification upon information and advice furnished by another advisor, another tax return preparer or other third party (including another advisor or tax return preparer at the tax return preparer’s firm). A tax return preparer, however, may not ignore implications of information furnished to the tax return preparer or actually known by the preparer. A tax return preparer must make reasonable inquiries if the information as furnished appears to be incorrect or incomplete. Additionally, some provisions of the Code or regulations require that specific facts and circumstances exist (for example, that a taxpayer maintains specific documents) before a deduction or credit may be claimed. A ta
