IRS BEEFS UP PREPARER CONDUCT STANDARDS
Washington, D.C. -- The Internal Revenue Service and the Treasury Department have implemented enhanced standards of conduct for tax preparers. Notice 2008-13 provides guidance regarding implementation of the tax return preparer penalty provisions.
Section 8246 of the Small Business and Work Opportunity Tax Act of 2007 amended several provisions of the Tax Code to extend the application of the return preparer penalties, as well as alter the standards of conduct that must be met to avoid imposition of the penalty for preparing a return that reflects an understatement of liability, and increase the applicable penalties.
Among other matters, the notice said that a tax return preparer will be found to have acted in good faith when the preparer relied on the advice of a third party who is not in the same firm as the preparer and who the preparer had reason to believe was competent to render the advice. A preparer is not considered to have relied in good faith if the advice is unreasonable on its face; if the preparer knew or should have known that the third-party advisor was not aware of all relevant facts; or if the preparer knew or should have known that the advice was no longer reliable due to developments in the law since the time the advice was given.
AICPA COMPILATION/REVIEW REQUIREMENTS
New York -- The American Institute of CPAs has issued guidance defining terms for describing the professional requirements of accountants who perform a compilation or review.
Its Statement on Standards for Accounting and Review Services No. 16, Defining Professional Requirements in Statements on Standards for Accounting and Review Services, describes the terminology used by the Accounting and Review Services Committee in the standards it sets for compilation and review engagements, and defines the terminology that the ARSC will use to describe the degrees of responsibility that the requirements impose on the accountant.
DELOITTE TO PAY $38.25M IN DELPHI DEAL
New York -- Deloitte & Touche has agreed to contribute $38.25 million to settle claims in a securities class-action lawsuit against bankrupt auto parts maker Delphi, without admitting any misdoings. Deloitte audited the financial statements of Delphi, which was accused of accounting improprieties that forced the company in June 2005 to restate its financial results for all fiscal periods going back to 1999. Delphi had earlier committed to pay $205 million to settle the case. The settlement is awaiting a judge's final approval.
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