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!
- EvaLv 72 months ago
It's errors and omissions insurance, not liability. It is not required, but many practitioners carry it.
- David 14Lv 72 months ago
Required? No. To be honest, YOU are 100% responsible for your tax form, even if the preparer screws it up royally.
- SlickterpLv 72 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.
- STEVEN FLv 72 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.