Other Preparer Penalties
In addition to the penalties mentioned earlier in the chapter, the following penalties may be assessed against return preparers (amounts apply to returns or refund claims filed in 2023 (generally 2022 returns) unless otherwise noted):
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$560 (up from $545 for 2022 filings) if the preparer endorses or negotiates any income tax check issued to the taxpayer. Will be $600 in 2024,
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$250 for each improper disclosure of return information, i.e., where the information is used for a purpose other than preparation of the return or $1,000 for cases in which the disclosure or use is made in connection with a crime relating to the misappropriation of another person's taxpayer identity ("taxpayer identity theft"). The calendar year limitation is $10,000 ($50,000 for instances related to taxpayer identity theft). The calendar year limitation is applied separately with respect to disclosures or uses made in connection with taxpayer identity theft (Code Sec. 6713(b)) The monetary penalty increases relating to a taxpayer identity theft crime apply to disclosures or uses on or after June 1, 2019, the date of the enactment of the Taxpayer First Act.
Additionally, a criminal penalty of up to $1,000 ($100,000 in the case of a disclosure or use that involves taxpayer identity theft) and/or imprisonment of up to one year may be imposed. (Code Sec. 7216(a), as amended by the Taxpayer First Act Sec. 2009(b))
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In addition, the following $55 (up from $50 for filings before 2023) penalties can be assessed for returns or refund claims filed in 2023 unless reasonable cause is shown:
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Each failure to furnish a completed copy of the return.
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Each failure to keep a copy of the return (or keep list).
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Each failure to reflect preparer’s ID number on return.
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Each failure to sign a return.
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Failure to retain and make available a record of preparers employed (the name, taxpayer identification number, and principal place of work during the return period of each preparer employed), plus $55 (previously $50) for each failure to include a required item in that record. (IRC Sec 6695(e); Sec 6060; Reg. 1.6060-1)
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Each of the foregoing penalties has a maximum of $28,000 for 2023 filings, $27,000 for 2021 and 2022 filings ($26,500 for filings in 2020, $26,000 for 2019 filings). These amounts are subject to inflation adjustment.