Question

Under what circumstances would a CPA be found liable for a preparer penalty when he or
she has not actually prepared the return?

Answer 1

Even though a CPA did not prepare the return ,they can be help liable for preparer penalty which is the penalty paid for giving wrong statements and helping clients to avoid tax. They are held liable if they help the preparer who prepared the false returns by giving wrong information , abetting with the statements, hiding information to save customers or helping the people doing wrong in anyway. All these actions make a CPA liable to the penalty equal to the person preparing the return.