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Do tax preparers need liability insurance?

If someone is a professional tax preparer who is credentialed, are they required to have liability insurance in case they goof-up on a client's return and get sued? Thanks!

4 Answers

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  • Eva
    Lv 7
    2 months ago

    It's errors and omissions insurance, not liability. It is not required, but many practitioners carry it.

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  • 2 months ago

    Required? No. To be honest, YOU are 100% responsible for your tax form, even if the preparer screws it up royally.

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  • 2 months ago

    There is no lawsuit for an error on the return, as the client is required to sign off on the return, indicating they see it to be accurate.

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  • 2 months ago

    It isn't legally required under Federal law. That said, NO ONE that issues 'credentials' will issue them without liability insurance. The Federal government doesn't issue such credentials.

    Update to comment: NO, the IRS does not require tax preparers to have ANY certification. They allow ANYONE to register so that if they do one return wrong, they can look at EVERY return they processed.

    Being a CPA actually has NOTHING to do with knowing anything about taxes.

    • Coffee Drinker
      Lv 7
      2 months agoReport

      The IRS requires paid tax preparers to be registered and to have completed at least a minimal training class on how to spot fraud - particularly regarding the EITC. And you can become a licensed and certified CPA without obtaining liability insurance which is a pretty good credential for tax prep

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