Question

You are a certified public accountant. A client enters your office on April 14 with a bag full of disorganized documents and receipts. He asks you to prepare his tax return and would be happy to file an extension. However, the client expresses some urgency and would like to file the actual tax return as soon as possible because he says, “I should get a refund for all the huge deductions.” When looking through the client’s documents and compiling the tax return, you realize that there are not enough supporting documents for deductions that would result in a refund.

Suggest an alternate solution to Circular 230 code 10.22 to communicate to the client.

Answer 1

Circular 230 code10.22 stipulates that the tax preparer must exercise due diligence in the tax returns preparation and other federal tax documents, ensuring oral and written communicated to the IRS to be correct and ensuring that the practitioner’s communications to the client regarding administration matters of IRS are correct

In order to comply with above law, client will be advised that he is required to bring supporting documents for deductions to file tax returns as to get a refund.