How do Tax Professionals fulfill their due diligence requirements?

Tax professionals fulfill their due diligence requirements primarily by making every effort to prepare accurate and complete returns. This involves a comprehensive process where the tax preparer actively engages in gathering, assessing, and verifying client information to ensure that the tax return is prepared according to the applicable laws and regulations.

Completing due diligence means that tax professionals must take proactive steps to confirm the information given by clients, ask the necessary questions, and seek supporting documentation as needed. This diligence helps to reduce errors and minimizes the risk of penalties for both the client and the preparer.

Relying solely on client-provided information does not meet due diligence standards, as it's essential that the tax preparer independently verifies the accuracy of the information to fulfill their ethical and legal obligations. Similarly, although the use of tax software can aid in processing returns efficiently, it does not replace the preparer's responsibility to review and ensure the correctness of the return. Lastly, verifying client information after submission does not align with the proactive nature of due diligence; verification should happen before the submission to avoid potential issues with accuracy and compliance.