Page 2 - Be Aware of 26 U.S.C. § 7216: You May, to Your Surprise, Be a Tax Return Preparer

[a]ny person who is otherwise compensated for preparing, or assisting in preparing, a tax
return for any other person.” 26 C.F.R. § 301.7216 1(b)(2)(i) (emphases added).

Furthermore,

[a] person is engaged in the business of preparing tax returns . . . if, in the course of
the person’s business, the person holds himself out to tax return preparers or

taxpayers as a person who prepares tax returns or assists in preparing tax returns,
whether or not tax return preparation is the person’s sole business activity and
whether or not the person charges a fee for tax return preparation services.

26 C.F.R. § 301.7216 1(b)(2)(ii) (emphasis added).

Thus, you are a tax return preparer subject to sections 7216 and 6713 if you (1) hold yourself
out to a taxpayer client, and/or to an accountant with whom you work, as a person who will

assist in preparing the client’s tax returns, even if that is only a small part of your business, or
(2) are compensated for assisting in preparing a tax return for a client.

What Is Disclosure or Use of Tax Return Information?

Any attorney who works with clients who have potential criminal tax problems, and/or who

are under investigation by the Internal Revenue Service (IRS) or the Department of Justice,
will almost surely assist in preparing a tax return for the client and/or use tax return
information in making arguments in the client’s defense.

For example, if a client who is not yet under investigation determines to make a voluntary
disclosure of tax misconduct under Internal Revenue Manual9.5.11.9 (Dec. 2, 2009) in order to
avoid prosecution (not a voluntary disclosure of a foreign bank account under the Offshore

Voluntary Disclosure Program program as that program ended on September 28, 2018), you
will be involved in assisting and directing the accountant who prepares the client’s delinquent
or amended tax returns, and you will likely draft riders to the returns as necessary.

In addition, the IRS Streamlined Domestic Offshore Program and Streamlined Foreign
Offshore Program for nonwillful taxpayers with undeclared foreign accounts are still in place
to ensure against prosecution, and they require delinquent or amended returns, riders, and a
certification of nonwillfulness. As those taxpayers’ attorney, you will surely direct and assist in

the preparation of their delinquent or amended returns.

Similarly, if a client who is under criminal tax investigation engages in negotiations with the
government, you will likely use tax return information in those negotiations. If the client
determines to plead guilty, an inevitable provision of the guilty plea will be filing accurate
amended tax returns, and you will be involved in the preparation of those returns, including
drafting any necessary riders.