Hi, my name is Garrett Gregory. I am a former IRS attorney and current co-founder of the Gregory Law Group. There are a couple of things that tax return preparers need to know. First of all, tax return preparers are the single most singled out group by the IRS. They are being targeted heavily. The IRS is specifically looking at several areas. If you prepare any returns that include refundable credits such as the Earned Income Tax Credit, the child tax credit, or the education credit, you need to be aware that each of these carries a potential $500 fine for you as the preparer if the IRS determines that you did not follow the required due diligence rules. In addition, the IRS has the power to enjoin you or seek to enjoin you from ever practicing before them again. This means that for the rest of your life, you will not be able to prepare tax returns for a fee or own a business that does so. Furthermore, if the IRS determines that you are a bad actor in the tax preparation community, they can seek criminal prosecution against you. If you have any dealings with the IRS or if you fear that the IRS is investigating you or your clients to determine the propriety of your actions as a preparer, it is essential that you immediately seek competent legal representation. If you need assistance or have any questions, we are here to help. You can contact us at the numbers listed on this website. We look forward to hearing from you, and thank you for watching our video.
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Due diligence penalty 2023-2024 Form: What You Should Know
Thus, 550 per return means 300 for all returns filed. Payment for Tax-Filing Errors Made in 2024 or Earlier Returns Feb 21, 2024 — In 2024 or earlier returns, if an error has been made and a payment has been made under Internal Revenue Code §668, the payment of the penalty is not required when the due diligence has been performed on the return. Rather, the IRS will send a notice requiring payment. The notice must include the following information: Form 983 — EIC Statement or Form 959 (Electronic Payment of Fiduciary Tax Payments) Form 4684 — Report of Certain Taxpayer Errors For 2024 and earlier, the due diligence penalty is 548 for all returns, including one return that does not need to be corrected, and 540 for each failure to correct a return. For the 2024 tax year, the due diligence penalty is 550. Penalties for Failure to Correct Certain Tax Returns Sep 1, 2024 — The tax return that is corrected must include a statement (Form 362) that includes: (a) A clear and conspicuous statement that the amended return applies only to the return to which it was amended; (b) The date(s) on which the corrected return was filed; and (c) The name and taxpayer identification number of the taxpayer on the amended return to which it applies.  For 2024 and earlier returns, the due diligence penalty is 530 for error that results in a failure to correct a return. For the 2024 tax year, the due diligence penalty is 555 for error that results in a failure to correct a return.
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