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Paid Preparer Info

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#1
Jmc  
Posts:
1
Joined:
17-Apr-2019 2:54am
Location:
Texas
I have noticed from time to time that the paid preparer info was filed with the wrong paid preparer signature. The paid preparer whose info was reported on the return was someone who had left the firm. The new signer forgot to change the signer to his name and was filed under the old signer’s name. What are the potential consequences of this, if any?
 

#2
makbo  
Posts:
5948
Joined:
23-Apr-2014 3:44pm
Location:
District 13
From the outside, it would look a lot like PTIN fraud. Technically, there is a penalty for the actual preparer not providing their own PTIN, you'd have to look up the penalty.

You describe it as just some kind of oversight, but if a PTIN holder no longer works at the firm, why is any of their PTIN info still available to be filled in on currently prepared returns? Sounds like careless disregard of in-house security to me. Plus, the former employee could well see that more returns are being prepared under their PTIN than they have knowledge of, they could report that to the IRS as they should, and then the returns so prepared might be held up for further scrutiny. Bad news all around.
 

#3
ATSMAN  
Posts:
1176
Joined:
31-May-2014 8:34pm
Location:
MA
Unless there was an "intent" to defraud and nothing bad happened, it can be explained as negligence. Once the problem is brought to the attention of management, they must take steps to correct it asap. If they fail to do that, then I think it exposes them to further liability of misuse of PTIN and the "intent" is then questioned.
 

#4
Posts:
467
Joined:
21-May-2018 7:50am
Location:
Hilton Head Island, SC
It is not as severe of a consequence as my story, but it reminds me of a scene from Suits where the owner of an investment firm is adamant he had no knowledge of illegal activities occurring under his nose by his hedge fund manager. Lawyer's response? "It is your [profanity] responsibility to know" (paraphrased). In other words, little oversight, and no controls.

Management should have immediately removed the departed preparer from software (or disabled them), and reassigned clients to another tax preparer. Failure to do so certainly represents poor controls, and as others mentioned, can lead to circumstances where intent is brought into question. Let's pretend the statement concerning the new tax preparer forgetting to change the paid-preparer info was not made, because it is management's responsibility to ensure that is done. It is why, for example, most tax prep programs allow you to easily reassign clients to different tax preparers.

Also, forget the printed name in the signature field. Do you not physically sign paper returns? Perhaps I am just uptight, but not a single printed return leaves my office without my physical signature over my printed name.
 


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