If a client wants to take a tax position that was previously rejected by a court, what should the tax preparer do?

The correct approach for a tax preparer when a client wishes to take a tax position previously rejected by a court is to advise the client that they can potentially take the same position again if there have been changes in circumstances. Tax law is dynamic, and new developments, amendments, or improvements in the facts of the situation can justify revisiting previously adjudicated positions. This recognition acknowledges the fluid nature of legal interpretations, and it permits clients to pursue arguments that may have merit under current conditions.

Advising the client in this manner allows for a thorough consideration of whether new evidence or shifts in the legal landscape may support the previously overturned argument. It also emphasizes that while prior court decisions carry weight, they are not absolute in every context, and ongoing evaluation is a necessary part of tax practice.

This approach encourages the tax preparer to engage in analytical deliberation concerning the specifics of the client’s current situation, thus fostering a responsible and informed strategy for handling their tax affairs, rather than blindly adhering to past decisions.