The IRS is authorized to impose penalties on a return preparer for multiple reasons. The IRS has specifically identified the following situations as shown below;

1. a failure to sign a return.
2. an understatement of a taxpayer's liability due to unreasonable position.
3. an understatement of a taxpayer's liability due to willful or reckless conduct.
4. a failure to furnish a copy of a return to a taxpayer.
5. a failure to furnish the tax preparer's identifying number.
6. a failure to retain required copies or lists.
7. a failure to file correct information tax returns.
8. the negotiation of check issued to a taxpayer.
9. a failure to be diligent in determining a taxpayer's eligibility for the Earned Income Tax Credit.

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