Preparer penalties relaxed

[ED SMITH]

Has this gone unnoticed?
The bailout package shelved the new preparer standards and penalties.

Return Preparer Penalty Modifications

Under the Tax Extender and Alternative Minimum Tax Relief Act of 2008, Congress modified Section 66941 to reduce the standard of care a tax preparer must exercise to avoid disclosing a tax position on a tax return from “more likely than not” to the less onerous “substantial authority.” Before this modification, tax return preparers were held to a higher standard than taxpayers with regard to reporting questionable positions on a return without disclosure. This left many taxpayers preparing their own returns, taking aggressive positions without making full disclosure and, as a result, potentially subjecting their non-signing tax advisors to the same penalties as tax return preparers. The new law essentially eliminates this disparity. In addition, under the new law, the more likely than not standard was retained for tax shelters and reportable transactions and the rule requiring disclosure of a reasonable basis position is retained.

http://www.pepperlaw.com/pepper/publications_update.cfm?rid=1529.0

[BOB W]

Has this gone unnoticed?
The bailout package shelved the new preparer standards and penalties.

Return Preparer Penalty Modifications

Under the Tax Extender and Alternative Minimum Tax Relief Act of 2008, Congress modified Section 66941 to reduce the standard of care a tax preparer must exercise to avoid disclosing a tax position on a tax return from “more likely than not” to the less onerous “substantial authority.” Before this modification, tax return preparers were held to a higher standard than taxpayers with regard to reporting questionable positions on a return without disclosure. This left many taxpayers preparing their own returns, taking aggressive positions without making full disclosure and, as a result, potentially subjecting their non-signing tax advisors to the same penalties as tax return preparers. The new law essentially eliminates this disparity. In addition, under the new law, the more likely than not standard was retained for tax shelters and reportable transactions and the rule requiring disclosure of a reasonable basis position is retained.

http://www.pepperlaw.com/pepper/publ...cfm?rid=1529.0

Ed> This is good news but I didn't read where the penalties have been reduced or eliminated just WHEN they would be incurred.