The IRS has identified the categories of tax returns and refund claims for purposes of the Code Sec. 6694 tax return preparer penalty. Solely for purposes of Code Sec. 6694, a return or claim for refund includes any of the tax returns listed in Section 3.02, or a claim for refund with respect to any such return. Definitions of return preparer and return are provided. Certain listed forms that include information that is or may be reported on a taxpayer's tax return or claim for refund will not subject the preparer to the Code Sec. 6694(a) penalty, but may subject the preparer to a willful or reckless conduct penalty under Code Sec. 6694(b) if the reported information constitutes a substantial portion of the tax return or claim for refund and is prepared willfully in any manner to understate the tax liability, or in reckless or intentional disregard of rules or regulations. The procedure is effective January 1, 2009, for all forms, tax returns, amended tax returns, and claims for refund filed on or after that date. Notice 2008-12, I.R.B. 2008-3, 280 and Notice 2008-46, I.R.B. 2008-18, 868, are obsoleted, and the list of forms in Notice 2008-13, I.R.B. 2008-3, 282, is modified and superseded.





Rev. Proc. 2009-11 , I.R.B. 2009-3, December 15, 2008.







SECTION 1. PURPOSE

This revenue procedure identifies the relevant categories of tax returns and claims for refund for purposes of the tax return preparer penalty under section 6694 of the Internal Revenue Code (Code), and identifies the returns and claims for refund required to be signed by a tax return preparer under regulations published by the Treasury Department and the IRS in order to avoid a penalty under Code section 6695(b). For other penalties that may be imposed on tax return preparers, see, for example, the regulations issued under section 6695.



SECTION 2. BACKGROUND

The Small Business and Work Opportunity Tax Act of 2007, Pub. L. No. 110-28, 121 Stat. 190 (the 2007 Act), was enacted on May 25, 2007. Section 8246 of the Act amended several sections of the Code by extending the application of the income tax return preparer penalties to all tax return preparers. The 2007 Act heightened the standards that must be met by preparers to avoid a penalty under section 6694(a) for understatements due to unreasonable positions from nonfrivolous to reasonable basis (if the position is disclosed), and from realistic possibility of success on the merits to reasonable belief that the position would more likely than not be sustained on the merits (if the position is not disclosed). The 2007 Act also increased the section 6694(a) penalty for understatements due to unreasonable positions from $250 to the greater of $1,000 or 50 percent of the income derived by the preparer, and increased the section 6694(b) penalty for willful or reckless conduct from $1,000 to the greater of $5,000 or 50% of the income derived by the preparer.

By extending the application of the income tax return preparer penalties to all tax return preparers, the 2007 Act amended section 6695(b) to impose a penalty on all tax return preparers of any return or claim for refund who fails to sign a return or claim for refund when required by regulations prescribed by the Secretary, unless it is shown that the failure is due to reasonable cause and not due to willful neglect. The penalty under section 6695(b) is $50 for each failure to sign, with a maximum of $25,000 per person imposed with respect to each calendar year. The amendments to section 6695(b) are effective for tax returns and claims for refund prepared after May 25, 2007.

The Department of Treasury and the IRS released Notice 2008-13, 2008-3 I.R.B. 282, on December 31, 2007 to provide interim guidance under section 6694. Additional guidance was provided in Notice 2008-12, 2008-3 I.R.B. 280, also released on December 31, 2007, with respect to the implementation of the tax return preparer signature requirement of section 6695(b). Notice 2008-46, 2008-18 I.R.B. 868, was released on April 16, 2008 and added certain returns and documents to Exhibits 1, 2, and 3 of Notice 2008-13. On June 17, 2008, the Treasury Department and the IRS published REG-129243-07, in the Federal Register, 73 F.R. 34560, which provides proposed amendments to the regulations reflecting amendments made by the 2007 Act.

Section 506 of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008, Div. C of Pub. L. No. 110-343, 122 Stat. 3765 (October 3, 2008) (the 2008 Act), amended the standards that must be met by preparers to avoid a penalty under section 6694(a) for understatements due to unreasonable positions from reasonable belief that the position would more likely than not be sustained on the merits to substantial authority for the position (for undisclosed positions). The 2008 Act did not change the standard in the 2007 Act applicable to disclosed positions. The 2008 Act also provided a special rule for tax shelters (as defined in § 6662(d)(1)(C)(ii)) and reportable transactions to which § 6662A applies, under which a position is treated as unreasonable unless it is reasonable to believe that the positions would more likely than not be sustained on the merits.

With this revenue procedure, the Treasury Department and the IRS are simultaneously issuing final regulations that revise the definitions of "return" and "claim for refund" in § 301.7701-15(b)(4) to only include tax return preparers of returns and claims for refund that are specifically identified in published guidance in the Internal Revenue Bulletin.



SECTION 3. RETURNS AND CLAIMS FOR REFUND SUBJECT TO THE SECTION 6694 PENALTY

.01 This Section identifies categories of returns to which the penalty under section 6694 could apply. The Treasury Department and the IRS may choose to add or remove documents from any of the categories in this revenue procedure in future guidance as they gain experience in implementing the provisions of the 2008 Act and the final regulations.



.02 Tax Returns Reporting Tax Liability

Solely for purposes of section 6694, a return or claim for refund includes the tax returns listed in this subsection enumerated below, or a claim for refund with respect to any such return. A claim for refund of tax includes a claim for credit against any tax and a request for abatement. A person who for compensation prepares all or a substantial portion of a tax return listed in this subsection, or a claim for refund with respect to any such tax return, is a tax return preparer who is subject to section 6694.



(1) Income Tax Returns - Subtitle A

Form 990T, Exempt Organization Business Income Tax Return;

Form 1040, U.S. Individual Income Tax Return;

Form 1040A, U.S. Individual Income Tax Return;

Form 1040-C, U.S. Departing Alien Income Tax Return;

Form 1040-EZ, Income Tax Return for Single Filers and Joint Filers With No Dependents;

Form 1040EZ-T, Claim for Refund of Federal Telephone Excise Tax;

Form 1040NR, U.S. Nonresident Alien Income Tax Return;

Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents;

Form 1040-PR, Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona fide de Puerto Rico);

Form 1040-SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico);

Form 1040X, Amended U.S. Individual Income Tax Return;

Form 1041, U.S. Income Tax Return for Estates and Trusts;

Form 1041-N, U.S. Income Tax Return for Electing Alaska Native Settlement Trusts;

Form 1041-QFT, U.S. Income Tax Return for Qualified Funeral Trusts;

Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons;

Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return;

Form 1120, U.S. Corporation Income Tax Return;