2. Ethics and Practice
TAX-102 · Lesson 2

Ethics on the floor

⭐ 0 XP
Briefing · 1 min

Clients trust you with everything.

What Dana said

Never make it upNo fake income, expenses, dependents or credits.
Ask and write it downWhen something looks off, ask questions and keep notes.
No promises, fair feesNever promise a refund amount or date. Agree on the fee up front, never a % of the refund.
Sign and protectSign with your PTIN, give the client a copy, and protect their data with a WISP.
D
Today is a busy day with some tricky moments. Do the right thing every time.
9:15 AM · Intake

Kim wants a bigger refund.

K
"My cousin said you can add my niece as my dependent so I get more back." (The niece does not live with Kim.)
10:30 AM · Fees and promises

OK or never?

Read each move, then tap where it belongs.

…
OKdo it every time
    Nevernot at our office
      1:00 PM · Security check

      Walk the office.

      Tap the 3 safe habits. One of these is a data leak.

      4:30 PM · Curveball

      A strange email arrives.

      !
      "IRS e-Services: your account is locked. Click here and enter your password to unlock it."
      Jazzy

      Shift complete!

      🏅 Trusted Pro · 0 XP
      • Say no to made-up numbers
      • Set fair fees with no promises
      • Keep client data safe
      • Spot a phishing email

      See it in the software

      Short how-to videos from the Nationwide software. Tap a video to play it here.

      Next →

      Lesson notes

      Want the details? Tap a card to open it.

      What you will learn
      • The standards of conduct that apply to paid preparers
      • How to protect taxpayer information
      • Penalties for improper preparation and how to avoid them
      Why ethics matters

      Clients trust you with their identity, income and family details. Your signature on a return says you prepared it based on the information provided and the law. Cutting corners hurts the client, the office and the whole Nationwide network.

      Core rules to follow
      • Never make up income, expenses, dependents or credits to increase a refund.
      • Ask questions when information looks incomplete or inconsistent, and document the answers.
      • Do not guarantee a refund amount or a refund date.
      • Charge fees that are clear and agreed in advance; never base your fee on the size of the refund.
      • Sign every return you prepare for pay with your PTIN and give the client a copy.
      Protecting client data

      Tax offices are required to protect taxpayer information. That includes a written information security plan (WISP), strong passwords and multi-factor authentication, locked storage for paper files, secure disposal and training staff to spot phishing. Report data theft to the IRS right away.

      Consequences of misconduct

      The IRS can assess preparer penalties for things like understating tax due to unreasonable positions, failing to sign a return, failing to provide a copy to the client and failing to meet due diligence requirements. Serious misconduct can lead to losing e-file privileges or criminal referral.

      Key terms
      • WISP: Written Information Security Plan for protecting taxpayer data
      • Due diligence: Required questions and records for certain credits and filing statuses
      • Circular 230: Treasury rules governing practice before the IRS
      Practice example (fictional)

      A client says: “My cousin said you can add my niece as my dependent so I get more back.” The niece does not live with the client. What do you do? Explain the dependent rules, ask the residency and support questions, and do not claim the niece unless she actually qualifies.

      Official sources
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