What Every Preparer Needs to Know Before They Touch a Return
Most people who get into tax preparation are taught how to fill in a return. Very few are taught the rules they are personally responsible for the moment they accept a fee.
This free training closes that gap. Tax attorney Jason D. Carr, Esq., LL.M., walks through the legal framework every paid preparer operates under: Circular 230, preparer penalties, due diligence, and the data security obligations that surprise almost everyone.
Watch the Free Webinar
You will learn:
- Who actually regulates tax preparers, and how
- What Circular 230 requires of you
- The preparer penalties the IRS can assess against you personally
- How the due diligence rules work, and why they are the biggest risk for new preparers
- Why you are treated as a “financial institution” and must have a written data security plan
- How to build a practice that is compliant from day one
What You Will Learn
1. You Are Entering a Regulated Profession
Preparing returns for compensation is not casual data entry. The moment you accept a fee, you take on legal duties to the IRS, your client, and in some cases state regulators. This session explains what those duties are in plain language.
2. Circular 230 and Your PTIN
Anyone who prepares federal returns for compensation must have a valid PTIN before preparing returns. You will also learn how Circular 230, the Treasury regulations governing practice before the IRS, sets the baseline for competence, diligence, and honest conduct.
3. Preparer Penalties Are Assessed Against You
The IRS can penalize the preparer, not just the client. Under IRC §6694, an understatement from an unreasonable position carries a penalty of the greater of $1,000 or 50% of your fee, and willful or reckless conduct carries the greater of $5,000 or 75%. Procedural failures under §6695, such as not signing a return or not including your PTIN, carry per-return penalties as well.
4. Due Diligence: The Biggest Risk for New Preparers
If you prepare returns claiming the EITC, the Child Tax Credit, the American Opportunity Credit, or Head of Household status, you are subject to due diligence rules under IRC §6695(g). For returns filed in 2026, the penalty is $650 per failure, up to $2,600 per return. You will learn the four requirements set out in Treas. Reg. §1.6695-2, including completing Form 8867, making reasonable inquiries, and keeping records for three years.
5. You Are a “Financial Institution”
Under the FTC Safeguards Rule, tax preparation firms are financial institutions and must maintain a written information security program. Tax and accounting professionals are covered regardless of size, and a written, accessible WISP is required; IRS Publication 5708 provides a sample template. Preparers confirm they have a data security plan at PTIN renewal.
6. Compliance as a Business Asset
Done right, compliance is not a burden. It builds client trust, attracts referral partners, and protects your practice and your ability to keep working. This session reframes the legal side as the foundation of a durable practice.
Who This Training Is For
- Aspiring and new tax preparers
- Career changers evaluating the profession
- Preparers who were never formally trained on the rules
- Anyone building an independent tax practice
Why Attorney-Led Training Matters
MuseSpring teaches ethics and preparer responsibilities before it teaches a single tax form. The Tax Business Blueprint Program builds the legal framework, Circular 230, preparer penalties, due diligence, and data security, directly into the Learn, Launch, and Scale phases.
Your Next Step
Watch the free webinar. If you want the full path, download the Tax Business Blueprint and watch the program overview.