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Just weeks before the filing season kicked off, the Treasury and the IRS released guidance related to new standards of conduct for tax return preparers, as well as guidance giving taxpayers greater protection and control over their tax return information held by return preparers.
Standard of Conduct Enhanced
Notice 2008-13 (IRB 2008-3, Dec. 31, 2007) addresses implementation of the Small Business and Work Opportunity Tax Act of 2007 (P.L. 110-28), which expanded the tax return preparer penalty and raised standards of conduct that return preparers must meet to avoid that penalty.
Under the new law, disclosure requirements for tax preparers were tightened, according to the American Institute of Certified Public Accountants (AICPA). To avoid a penalty, preparers would have "to seek disclosure to the IRS of any tax positions taken by a taxpayer that didn't meet the Internal Revenue Code's 'More Likely Than Not' standard" (i.e., "a reasonable belief that the position has a greater than 50 percent chance of being accepted by the IRS or a court"), the AICPA reports.