Which one of the following statements relating to return preparer's penalties is incorrect?
A)$1,000 penalty for willful understatement of tax liability, or for understatement of tax liability due to reckless or intentional disregard of the rules and regulations
B)$50 penalty for failure to furnish a copy of the tax return to the taxpayer
C)$50 penalty for failure to sign a tax return if prepared for compensation
D)$50 penalty for failure to retain a copy or record of a return prepared for compensation

Question

Quizplus · Accepted Answer

The incorrect statement is A because the penalty for willful understatement of tax liability, or for understatement due to reckless or intentional disregard of rules and regulations, is not fixed at $1,000. The actual penalties can vary and are often more severe, depending on the specifics of the violation.

Which One of the Following Statements Relating to Return Preparer's