Lesson 2: Tax Preparer Responsibilities & Ethics

Lesson 2: Core Responsibilities and Ethical Standards in Financial Services

As a professional within the financial services industry, you hold a position of trust, responsibility, and integrity. Your core responsibilities include providing accurate, reliable, and compliant financial guidance to clients, ensuring that all actions reflect the highest ethical standards.

Core Responsibilities:

• Accurate Client Representation: Meticulously gather and verify client financial information to provide appropriate recommendations.

• Compliance with IRS Regulations: Adhere strictly to IRS due diligence requirements, which mandate thorough verification of income and eligibility when preparing tax returns or financial documents.

• Confidentiality: Maintain the confidentiality of all client data in accordance with legal and ethical guidelines.

• Continual Education: Stay informed about current tax laws, financial regulations, and industry best practices.

Ethical Standards:

• Integrity: Always act honestly and transparently, avoiding any conflicts of interest.

• Objectivity: Provide unbiased advice that serves the client's best interest.

• Confidentiality: Protect sensitive information against unauthorized disclosure.

• Professional Behavior: Uphold respect and professionalism in all client interactions.

Understanding IRS Due Diligence Requirements:

The IRS requires financial professionals to perform due diligence to prevent errors or fraud in tax preparation. This includes:

• Verifying income and eligibility through supporting documentation.

• Documenting all information gathered to substantiate client claims.

• Ensuring eligibility for tax credits and deductions through rigorous review.

What to Do If You’re Unsure:

• Seek Guidance: Consult internal resources, supervisors, or industry experts when faced with uncertainties.

• Refer to IRS Publications: Use IRS guidelines and official publications to clarify compliance questions.

• Document Concerns: Keep clear records of any doubts and the steps taken to resolve them.

• Avoid Assumptions: Never guess or make decisions without sufficient evidence or clarity; prioritize accuracy and compliance.

Adhering to these responsibilities and ethical principles ensures not only compliance with laws and regulations but also builds client trust and strengthens the reputation of the financial services profession.