In Carlson v. United States, Case No. 12-13736 (decided June 13, 2014), the United States Court of Appeals for the Eleventh Circuit addressed several important issues regarding when a tax return preparer is liable for penalties for preparing returns that understate a client’s tax liability. Ms. Carlson worked as a tax return preparer for two different companies. The IRS conducted audits of hundreds of tax returns she had prepared for clients and determined that 40 contained deductions that could not be substantiated. The IRS assessed a 15 percent penalty against Ms. Carlson for aiding and abetting the understatement of tax… Read more