Accounting News

Monday, October 31, 2011
Increased Fines for Tax Preparers

Hidden in the trade deal with South Korea that was passed last weak were some surprises for tax preparers. The penalty for failing to exercise "due diligence" when claiming Earned Income Tax Credits for a client was raised from $100 to $500. The penalty can be enforced every time the preparer fails to perform the "due diligence."

There is little doubt that there is a great deal of fraud associated with the Earned Income Tax Credit. But I think the problem is with any refundable credit. If the real goal is to eliminate fraud they should not be refundable. It seems strange that you could have negative taxes.

Additionally, there are provisions that increase the estimated taxes owed by companies with assets of $1 billion or higher during the third calendar quarter of 2012.