Tax Return Preparers, Penalties & Disclosure | CPA REG Foundations

REG tests tax return preparer rules by asking who qualifies as a preparer, what duties apply, whether a tax position has adequate support, and whether disclosure or documentation affects penalty exposure. In this CPA REG Foundations lesson, you’ll learn how to separate a tax return preparer’s responsibilities from the taxpayer’s responsibilities and apply the correct rule to practical REG Exam scenarios. The lesson introduces a six-step framework: 1. Determine whether the person is a tax return preparer 2. Identify the applicable preparer duty 3. Evaluate substantiation and support 4. Determine whether disclosure is needed 5. Evaluate the preparer’s conduct 6. Determine the resulting consequence or penalty You’ll also learn the distinction between signing and non-signing preparers, PTIN and recordkeeping requirements, due diligence, reasonable reliance on client information, preparer versus taxpayer penalties, disclosure standards, and separate foreign-account reporting requirements. CHAPTERS 00:00 Tax return preparer rules 00:18 REG Exam framework 00:36 Six-step preparer framework 01:14 Who is a tax return preparer? 01:26 Compensation requirement 01:36 People who are not preparers 01:55 What counts as a substantial portion 02:10 Signing vs. non-signing preparers 02:32 Non-signing preparer example 02:50 Preparer duties and penalties 02:58 PTIN requirement 03:09 Signing the return 03:14 Providing the taxpayer a copy 03:16 Record retention 03:22 Due diligence 03:36 Reasonable reliance on client information 03:54 Incomplete or inconsistent information 04:23 Evaluating preparer conduct 04:33 Unreasonable positions 04:45 Willful or reckless conduct 05:00 Preparer penalties 05:40 Substantiation and disclosure 06:20 Reasonable basis and substantial authority 06:55 Disclosure and penalty protection 07:30 Frivolous positions 08:00 Taxpayer vs. preparer penalties 08:35 Foreign account reporting 09:15 Applying the framework 09:45 Common REG Exam traps 10:23 Final preparer framework Key concepts covered: • Tax return preparer • Compensated preparer • Signing preparer • Non-signing preparer • Substantial portion of a return • Preparer Tax Identification Number • PTIN • Preparer recordkeeping • Due diligence • Reasonable reliance • Reasonable inquiry • Tax return preparer penalties • Taxpayer penalties • Unreasonable tax positions • Willful conduct • Reckless conduct • Substantiation • Disclosure • Reasonable basis • Substantial authority • Frivolous tax positions • Foreign bank account reporting • FBAR • FinCEN Form 114 • REG Exam preparer questions Use this video as part of the CPA REG Foundations — Area I: Ethics & Federal Tax Procedures series. After watching, reinforce these concepts with related multiple-choice questions and task-based simulations in your CPA review course. Continue with the CPA REG Foundations — Area I playlist:    • CPA REG Foundations — Area I: Ethics & Fed...   Start with the REG CPA Exam — Start Here playlist:    • REG CPA Exam — Start Here   CPA Explained AI is an independent educational platform and is not affiliated with, endorsed by, or sponsored by the AICPA, NASBA, or any CPA review course provider. #CPAExam #CPAREG #TaxPreparer #TaxPenalties