IRC §6694 · 26 U.S.C. §6694
IRC §6694: Preparer Penalties
IRC §6694 penalizes preparers — starting at $1,000 per return for unreasonable positions and $5,000 for willful or reckless conduct. It is why reputable firms document authority for every aggressive position and why the cheapest preparer is often the most expensive mistake.
What it governs
- Unreasonable positions: $1,000-plus per return
- Willful or reckless conduct: $5,000-plus per return
- Form 8275 disclosure as the penalty shield
- Firm-wide compliance procedures matter at scale
In the GuideFull treatment in Chapter 19 of the Guide — THE TAX CUTTERY® Guide to Federal Income Taxation, Professional Edition (564 pages, 24 chapters).
From the practiceThe credentials, compared →
Questions this section answers
- Does the preparer penalty protect me?
- No — it is assessed on the preparer, on top of your own penalties. You still owe yours.
- What is Form 8275 for?
- Disclosure: telling the IRS exactly which position you're taking and why. It defeats several penalties when the position has a reasonable basis.
- How do I pick a preparer who won't trigger this?
- Credentials you can verify (EA, CPA, attorney), a real PTIN, written authority for aggressive positions, and no promises about refunds.
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The Guide treats 149 Code sections across 24 chapters — every claim verified against primary sources.
Get the Guide — $299