Tax Return Preparer Penalties & Investigations
The IRS has broad authority to investigate the conduct of tax return preparers. These investigations can result in substantial civil penalties and sanctions such as expulsion from the IRS e-file program, in addition to possible referral for criminal investigation. We represent tax professionals and firms facing IRS tax return preparer investigations, penalties, and sanctions, including:
- Failure to comply with due diligence requirements. IRC Sec. 6695(g)
- Violation of IRS e-file rules, resulting in expulsion or suspension from the IRS e-file program (EFIN expulsion/suspension).
- Understatement of tax due to willful or reckless conduct. IRC Sec. 6694(b).
Tax return preparers or tax professional facing these issues should consult with an experienced tax attorney as soon as possible.
Sample IRS Notices
Results
We are committed to delivering results for our clients. We invite you to review a sample of Tax Return Preparer Penalty & Investigation cases that we have successfully resolved for our clients. All cases are different and the summaries below should not be interpreted as a prediction or guarantee of success or specific results.
Proposed Suspension of CPA Firm's EFIN Reversed
The IRS proposed a 2-year suspension from the IRS e-file program against a CPA firm. DeWitt Law appealed the decision and the IRS Office of Appeals reversed the suspension.
Taxpayer Re-Instated to IRS E-File Program
The IRS expelled the Taxpayer from participating in the IRS e-file program. DeWitt Law filed an administrative appeal. A hearing was held and the Taxpayer was re-instated to the IRS e-file program.
Proposed Due Diligence Penalties Reversed
The IRS initiated an audit/examination under I.R.C. § 6695(g) for alleged failure to be diligent in determining eligibility for certain refundable credits, including the Earned Income Tax Credit. The IRS proposed assessing a six-figure penalty against the Taxpayer. DeWitt Law filed an appeal and a hearing was held. All penalties were reversed.
Tax Preparer Fraud Investigation Closed
The IRS initiated a civil fraud investigation against the Taxpayer who operated as a small tax preparation company. The investigation ended with no penalty assessment or judicial action for fraud.
Expulsion from IRS E-File Reduced to Suspension
The IRS expelled the Taxpayer from participating in the IRS e-file program. DeWitt Law filed an administrative appeal. A hearing was held and a suspension was imposed instead.
Criminal Investigation Closed Against Tax Return Preparer
The IRS Criminal Investigation Division initiated a criminal investigation against the Taxpayer who operated a small tax preparation business. The investigation was later closed and no criminal charges were filed. Learn More.
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