AICPA submits comments to treasury, IRS on tax return preparer penalties.

• Position: Tax info

The AICPA last month sent a letter to the Treasury Department and the Internal Revenue Service regarding proposed regulations for tax return preparer penalties that changed as a result of a law passed in May 2007 (the same law that imposed the "more likely than not" provision for tax positions on returns). While the AICPA generally was highly supportive of the proposed regulations, the Institute offered several recommendations and suggestions to enhance the guidance available to the tax community and facilitate administration of the proposed regulations.

Among the comments are recommendations that the final regulations:

* Clarify when a tax return preparer is required to sign a return.

* Define a "return" in a manner consistent with the definition of "return" for income tax purposes, as established by case law.

* Clarify that, subject to the same limitations that apply in determining reasonable cause, a tax return preparer may rely on advice furnished by the taxpayer, an adviser, another tax return preparer, or other party in determining if the reasonable...