What are the legal potential issues here?

What are the ethical / legal issues involved with aiding others in doing their taxes for pay?

• I'm in the USA, and I'm an accountant for a local corporation. I get asked often for accounting advice from smaller fries. It'd be a good source of side income for me. I'm not a CPA, and I do not have any tax preparer certification. I do know what I'm doing, though. Where is the line? If I prepare the books, and then help them fill out the tax forms they're already doing, and they sign off on it, am I within the law, or breaking it? I certainly don't want to be on the wrong side of the law. And, I know my liability is high. Just wanted an assessment of potential ethical and legal issues for helping others with accounting issues that lead directly to tax remittances and consequences?

• Answer:

  Download IRS Circular 230. It has what you need to know about tax work from the IRS' perspective. It's about 40 pp but it's fairly easy to use to answer your questions about practice before the IRS. I am an accountant too, but a CPA. When i worked in public accounting we would *compile* financial statements and prepare tax returns based on them. You may want to check with your state as to what constitutes unlicensed "public accounting practice," though, especially if you are being paid. I would assume if you are not attesting to the fairness of the underlying financials, there is no issue. But check with your state's Board of Accountancy.