Area 1: Ethics, Professional Responsibilities, and Federal Tax Procedures (10-20%)
0 of 42 questions attempted
| Penalty | Trigger | Amount | Defense |
|---|---|---|---|
| §6694(a) | Unreasonable position (undisclosed: fails substantial authority ~40%) | Greater of $1,000 or 50% of preparer income | Reasonable cause and good faith |
| §6694(a) — disclosed | Disclosed position fails reasonable basis (~20%) | Greater of $1,000 or 50% of preparer income | Reasonable cause and good faith |
| §6694(a) — tax shelter | Tax shelter position fails more likely than not (>50%) | Greater of $1,000 or 50% of preparer income | Reasonable cause and good faith |
| §6694(b) | Willful or reckless conduct | Greater of $5,000 or 75% of preparer income (reduced by 6694(a)) | No defense available |
| §6695 — admin | Failure to sign, furnish PTIN, provide copy, retain records | $55 per failure (max $28,000/year per category) | Reasonable cause |
| §6695(g) — due diligence | Failure to meet EIC/CTC/AOTC/HOH due diligence | $600 per credit per return | Reasonable cause |