26 USC 6694 provides for a $1K penalty for each return by a preparer who knew or should have known that the argument was frivolous. $5K if the preparer willfully understated liability, or intentionally or recklessly disregarded rules or regs.
'CtC' has already been determined to be frivolous. Could a preparer using 'CtC' also be found to have violated the higher standard? Probably quite easily.
26 USC 6701 provides for a $1K penalty for aiding and abetting an understatement of tax. That would also be per return.
26 USC 7206 provides for criminal felony prosecution for assisting in the preparation of a false return at a cost per pop of $100K or 3 years in prison, or both.
http://www.law.cornell.edu/uscode/26/us ... -000-.html§6694, in condensed part wrote:If a tax return preparer prepares any return or claim of refund with respect to which any part of an understatement of liability is due to [an unreasonable position,] and knew (or reasonably should have known) of the position, such tax return preparer shall pay a penalty with respect to each such return or claim in an amount equal to the greater of $1,000 or (...)
Any tax return preparer who prepares any return or claim for refund with respect to which any part of an understatement of liability is due to [a willful attempt in any manner to understate the liability for tax on the return or claim, or a reckless or intentional disregard of rules or regulations] shall pay a penalty with respect to each such return or claim in an amount equal to the greater of $5,000 or (...)
http://www.law.cornell.edu/uscode/26/us ... -000-.html§6701, in condensed part wrote:Any person who aids or assists in, procures, or advises with respect to, the preparation or presentation of any portion of a return, affidavit, claim, or other document [and] who knows (or has reason to believe) that such portion will be used in connection with any material matter arising under the internal revenue laws and who knows that such portion (if so used) would result in an understatement of the liability for tax of another person, shall pay a penalty with respect to each such document in the amount [of] $1,000.
http://www.law.cornell.edu/uscode/uscod ... -000-.html§7206, in condensed part wrote:Any person who [w]illfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim, or document (...) shall be guilty of a felony and upon conviction thereof shall be fined not more than $100,000 (...) or imprisoned not more than 3 years, or both
Nasty stuff. Prepare a hundred 'CtC' returns and perhaps wind up owing $500K+ in penalties and maybe a little time in a federal pen.
Go for it, "lorne." Assuming that you aren't a carefully constructed troll. You can easily beat the CtC clowns who only owe $30K or $50K and even the current record-holding CtC moron who admitted to owing over $100K of frivolous filing penalties.