Real Estate Appraisers and the Revised Tax Preparer Penalty Statute: Evolution, Rules, and Reality

摘要

Persons who perform appraisals that impact a federal tax return can be penalized if they do not comply with the standards governing tax return preparation. In the past, Internal Revenue Service (IRS) standards of care were highly subjective and the tax preparer penalty statute was limited to federal income tax returns. New IRS standards of care are more objective and rigorous. Additionally, the scope of the tax preparer penalty statute has been broadened to include preparers of estate and gift tax returns. This article discusses provisions and situations in which appraisers could be considered tax preparers subject to penalties by the IRS.