A tax preparer cannot:
- Sign a tax return that is improper (obviously incorrect or illegal).
- Take a position advising a change in a tax return that does not have more than 50% probabilities of being individually corroborated.
- In accordance with tax law, to fulfill your obligations as a tax preparer who receives a payment, sometimes it may be necessary for you to explain to a taxpayer your cooperation so that you can continue preparing your tax return. If a taxpayer does not have receipts or documentation of business expenses and refuses to reconstruct or obtain records substitutes, you cannot sign the statement.
- There is a difference between a taxpayer who is overwhelmed by other responsibilities and one who intends to commit fraud. It is your responsibility to apply a reasonableness check to determine reality.