Jefferson had his tax return prepared at a new location this year, which advertised unbelievable low prices. However, when Jack was reviewing his return later, he noticed it had not been signed by the preparer. Which of the following individuals are required to sign tax returns? a) Enrolled agents only b) All paid preparers c) Attorneys only d) Certified public accountants only
The correct answer and explanation is:
Correct Answer: b) All paid preparers
Explanation:
According to the Internal Revenue Service (IRS), any individual who is compensated for preparing, or assisting in preparing, all or substantially all of a federal tax return must sign the return and provide their Preparer Tax Identification Number (PTIN). This rule applies regardless of the professional designation the preparer may hold.
A paid preparer refers to anyone who prepares tax returns for compensation. This category includes enrolled agents, certified public accountants (CPAs), attorneys, and even individuals without formal credentials, as long as they are paid for their service. These individuals are legally obligated to include their signature and PTIN on any tax return they prepare for a client. This requirement helps the IRS track who is preparing returns and promotes accountability.
If a tax return is prepared by a volunteer or by the taxpayer themselves, no preparer signature is required. However, when a preparer is paid for the service, the failure to sign the return is a serious violation of tax law and IRS regulations. It could be a red flag indicating unethical or potentially fraudulent behavior. In such cases, the taxpayer might be at risk of inaccuracies, potential audits, or penalties.
The law does not restrict the signature requirement to specific professions like attorneys, CPAs, or enrolled agents. While those professions are authorized to represent taxpayers before the IRS, the signature obligation applies to all individuals who are paid to prepare tax returns.
Therefore, Jefferson’s concern is valid. If his tax return was prepared by a paid individual and it was not signed, that preparer may not be in compliance with IRS regulations. He should consider reporting the issue and possibly seeking review by a qualified and ethical tax professional.