Tax Administration: Effectiveness of IRS' Return Preparer Penalty Program is Questionable

Tax Administration: Effectiveness of IRS' Return Preparer Penalty Program is Questionable PDF

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Published: 1991

Total Pages: 74

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In 1989, almost half of the individual income tax returns filed were prepared by paid return preparers. The Internal Revenue Service (IRS) has experienced problems with what it calls incompetent and unscrupulous tax return preparers who understate their clients' tax liabilities. Civil penalties are a principal tool IRS can use to punish and deter noncompliant behavior by preparers. The Senate Finance Subcommittee on Private Retirement Plans and Oversight of IRS asked GAO to review whether IRS administers preparer penalties appropriately and consistently.