A compensated tax return preparer may be subject to a fine under the Internal Revenue Code if the criteria for due diligence are not met. If you don't follow the four due diligence obligations. you may be subject to penalties under Internal Revenue.
The maximum penalty for a return or claim submitted in 2021 is $2,160 per return and $540 for each tax benefit claimed. When the tax return includes the earned income tax credit, due diligence requires professional tax return preparers to ask further questions of taxpayers who seem to be making contradictory, false, or incomplete representations regarding their self-employment.
If you have an audited tax bill that is less than zero dollars, this tool will assist you in determining the papers you must send to the IRS.
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