Burden for preparers

Tax preparers may start being tougher in asking you to prove your entitlement to certain deductions. This is because a law was recently passed that requires these professionals to help weed out tax dodgers. This may result in increased paperwork and greater fees to some taxpayers since a longer amount of time will be required for preparing many returns.

Tax preparers now rely on different standards thanks to the IRS. This change is supposed to encourage preparers to be more careful about agreeing to sign returns with shady or extreme income tax deductions without warning the IRS of such behaviors through a specialized communication form. 

Preparers may also face high penalties, especially if they are preparing returns involving estate or gift taxes, or employment or excise taxes. They also are scrutinized highly when preparing returns for organizations that claim tax-exempt status.

Taxpayers must understand the changes in the rules relating to these topics. Preparers now cannot offer advice without being very careful to ensure that they are aware of all details of the situation, or they can be penalized.

For this reason, preparers may decline to sign the tax return unless taxpayers provide better documentation than they have in past years. In some cases, preparers may decline to file the return at all.

Tax preparation fees could also increase in some situations. This is because preparers may need more time to research the complex tax requirements that are increasingly being imposed by the government.