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Wiley Tax Preparer: A Guide to Form 1040 by The Tax Institute at H&R Block

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CHAPTER 40

Duties and Restrictions Relating to Practice before the IRS

As a tax return preparer you must comply with the duties and restrictions of limited practice before the IRS. You must adhere to various duties and responsibilities in order to stay in good standing with the IRS and avoid disciplinary actions.

These duties and responsibilities are detailed in Part B of Circular 230, Regulations Governing Practice Before the Internal Revenue Service. (Rules for Part A of Circular 230 are discussed in Chapter 39; rules for Part C of Circular 230 are discussed in Chapter 41.) Understanding your obligations as a preparer is just as important as understanding the tax rules you use to prepare returns. This chapter discusses the duties and responsibilities in the same order in which they are presented in Circular 230.

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DEFINITION: Privilege applies to attorney-client communications if: the communication in question is made in confidence, in connection with the provision of legal services, to an attorney, and in the context of an attorney-client relationship. There is no privilege for information used to prepare tax returns because that information is intended to be disclosed to a third party—the IRS. With respect to tax advice furnished by an EA or CPA, the same common law protections of confidentiality that apply to a communication between a taxpayer and an attorney also apply to ...

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