Return preparer penalties are streamlined and toughened by RRA '89

Article Abstract:

The Revenue Reconciliation Act (RRA) of 1989 has implemented a new series of penalties for income tax return preparers for filings after 1989. RRA levies a $250 fine on preparers that submit understatements of liability brought about by unrealistic positions in cases where the preparer knew or should have known the position was frivolous or was not disclosed. RRA levies a $1,000 fine on preparers willfully understating a tax or intentionally or recklessly disregarding regulations. A fine of $1,000 for personal tax returns and $10,000 for corporate tax returns will be levied against anyone assisting, aiding, or advising the preparation of a tax document understating a tax liability. A $500 fine will be levied against individuals preparing frivolous income tax returns.

Methods

---

How to minimize return preparer liability when using microcomputers for preparation

Article Abstract:

The microcomputer programmer was determined to be a tax preparer in the Ltr. Rul. 8111071. In the case, a computer was rented and the individual developed his own program so that he could prepare his own Form 1040, Schedules A and B or Form 1040A. The preparation instructions for the tax return delineated every entry that could be used by the taxpayer who knew little about taxes and had not previously used a computer. The decision distinguishes between preparer and nonpreparer status as a result of the level of knowledge required to respond properly to the prompt lines on the program.

Accounting, Technology application

---

Taxpayers must overcome tough hurdles before deductions for microcomputers are allowed

Article Abstract:

Strict requirements must be met before businesses can obtain deductions for employee home use of microcomputers. Employee use alone is not sufficient to secure a deduction. The employer must be able show that the computer is used for the convenience of the business, and that the ability to use a computer is a condition of employment. The IRS' interpretation of this rule and the procedures for obtaining this deduction are discussed.

Office equipment and supplies, Office supplies, Taxation, Business enterprises, Tax deductions, United States. Internal Revenue Service

Similar abstracts:

• Abstracts: Eastern promise. The ins and outs of payroll. Untangling the web
• Abstracts: Southwestern Camera opens fourth location; company set to celebrate 65 years. A look at recent news for photo retailers
• Abstracts: Budgetary control of hospitals - ritual rhetorics and rationalized myths? Measuring productivity and quality changes using data development analysis: an application to Catalan hospitals
• Abstracts: Deducting interest paid to foreign or tax-exempt related entities is now tougher. Using a corporation to shelter investment income need not subject it to special tax
• Abstracts: Corporate acquisitions and hidden tax liabilities: avoiding the 100% penalty. Distribution of a subsidiary's stock is not a dividend

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.