Do I need to be licensed to do tax returns for individuals for a fee?

[watsojd1]

I'm a college accounting major who has taken a tax accounting class. This coming January, I'd like to start doing people's returns for a small fee. I may even do them for free, who knows.

Anyway, if I do decide to do them for a fee, do I need to have some sort of tax preparer license or be supervised by a CPA?

Either way, I plan on consulting with a tax lawyer to see if I need some sort of waiver in case someone doesn't disclose all their information to me and then the IRS comes after me.

Any other advice is welcome...

 

[kirby]

If you sign return as preparer irs requires you to have an ITIN number. If you don't have an ITIN , there is a $50 fine per return.

 

[DavidTreitel]

You would be prudent to have insurance. If in the UK you would be unable to trade without being supervised for money laundering purposes as this would be a criminal offence.

If in the States, several States have mandatory licensing.

 

[Samir]

I would do returns, but wouldn't sign them as a paid preparer. I've seen this done. Then all the liability is on the taxpayer.

 

[caspergreen68]

True that if you are not a paid preparer then the liability is on the payer..

 

[ColinCPA]

I would do returns, but wouldn't sign them as a paid preparer. I've seen this done. Then all the liability is on the taxpayer.

Not signing the return does not relieve you of classification as a "paid preparer". Also, the IRS imposes a penalty of $50 per return, not to exceed $25,000, for failure to sign the return as a paid preparer. Also, the taxpayer is ultimately responsible for his/her own return, regardless of who prepared it.

 

[Samir]

Not signing the return does not relieve you of classification as a "paid preparer". Also, the IRS imposes a penalty of $50 per return, not to exceed $25,000, for failure to sign the return as a paid preparer. Also, the taxpayer is ultimately responsible for his/her own return, regardless of who prepared it.

Interesting. So how would a 'paid preparer' that didn't sign get discovered? Would it be solely through the taxpayer?

 

[The Finance Writer]

Every year, the IRS manages to discover paid preparers who have illegally failed to sign tax returns. Getting an ITIN is fairly easy and I commend watsojd1 for having enthusiasm about the tax business. As a college student, watsojd1 might consider learning more about tax preparation than is available at school by studying for the Enrolled Agent exam. That is a good addition to the college degree and accomplishes a big step toward a tax career. A solid course is available at Enrolled Agent Exam Prep and EA Study Guide