With busy season fast approaching, here’s some important information for tax preparers, courtesy of the AICPA. I’m simply going to quote directly from an AICPA release:

“The Internal Revenue Service and the U.S. Treasury Department have issued interim guidance for tax preparers that the American Institute of CPAs believes will provide temporary relief from potential penalties under a flawed law passed by Congress in May 2007.

“The U.S. Congress passed a law in May that tightened the disclosure requirements for tax preparers under Section 6694 of the tax code. Under the law, in order to protect themselves from a potential penalty, preparers would be required to seek disclosure to the IRS any tax positions taken by a taxpayer that didn’t meet the Internal Revenue code’s ‘More Likely Than Not’ standard.

“In general, the ‘More Likely Than Not’ standard requires a reasonable belief that the position has a greater than 50 percent chance of being accepted by the IRS or a court. The IRS and Treasury delayed implementation of the new law in June. This guidance provides tax return preparers with an understanding of how they can comply with the new law during the current filing season and until final IRS guidance is developed.”