Question

Joshua and Donna were married. Mya has been their tax preparer for many years. During a meeting with Mya, they disclosed they recently divorced. Mya explained to both of them that a conflict of interest has arisen in their case. They decided to waive the conflict, and both signed separate waivers to continue with Mya as their tax preparer. What is the minimum amount of time that Mya is required to retain the waivers?

Answer 1

In this case, Mya, the tax preparer, should retain the waivers for a minimum of six years as per ethical guidelines for tax professionals.

Tax preparers are typically required to retain waivers of conflict of interest for at least three years from the date of tax return preparation, although retaining such documents for up to seven years may be advisable due to other potential legal needs.

Step-by-step explanation:

In the situation described, Mya, the tax preparer, faces a potential conflict of interest after Joshua and Donna, previously a married couple, get divorced. They have both chosen to continue working with Mya and signed separate waivers. The Internal Revenue Service (IRS) has specific guidelines on the duration for which tax preparers must retain records, including any waivers of conflicts of interest. Although these guidelines can vary, a typical period for keeping such waivers is at least three years from the date of the tax return preparation. Nevertheless, given the fact that this is a legal matter, it is always good practice for tax professionals to retain documents for longer periods, possibly up to seven years, as other regulations or issues may arise requiring access to those documents.

Answer 2

Tax preparers should retain conflict of interest waivers for a period prescribed by legal and professional standards, which could vary by jurisdiction but often aligns with the period for maintaining tax return records or longer. Consultation with legal counsel or regulatory guidelines is recommended to determine the specific time frame.

Step-by-step explanation:

The question pertains to the retention period of written waivers in a scenario where a tax preparer is facing a potential conflict of interest when handling the tax matters of divorced clients. While the specific time frame for retention may vary based on jurisdiction and regulatory body guidelines, in general, tax preparers are often required to comply with certain ethical standards and regulations. For instance, according to the Internal Revenue Service (IRS) in the United States, tax preparers are advised to retain records that support a taxpayer's returns for a period of at least three years from the date the tax return is filed or the date the tax is paid, whichever is later. However, for waivers related to conflicts of interest, the retention requirements might differ and could be longer depending on state laws or professional ethical guidelines. Typically, such written records should be maintained for a period that aligns with legal and professional standards for record retention, which could potentially extend beyond the typical three-year period. Tax preparers should consult relevant regulatory guidelines or legal counsel to determine the appropriate retention period for conflict of interest waivers in their specific jurisdiction.