Guidance: return preparer penalties.(IRS News)

A May 8, 2009, Interim Guidance Memorandum SBSE-04-0509-009 on preparer penalty procedures for estate and gift tax cases was issued by the IRS Small Business/Self-Employed Division. This interim guidance will be added to the Internal Revenue Manual at 4.25.1 by May 8, 2010.

The guidance reminds IRS estate tax attorneys of the importance that estate and gift tax return preparers abide by IRC secs. 6694 and 6695. These attorneys are urged to consider return preparer penalties during every transfer tax examination, but are cautioned that preparer penalties should not be proposed until after the estate or gift tax examination is complete at the group level. The guidance also warns IRS attorneys that return preparer penalties should never be discussed in the presence of the taxpayer as "each estate or gift tax examination is separate and distinct from the return preparer penalty case."

You can review the guidance at www.calcpa.org/IGM.

--Stuart R. Josephs, CPA, Tax Assistance Practice, San Diego

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