Last call for ethics! Don’t miss CPE by Dec. 31
Year-end is coming fast, and so are your final chances to earn this year’s ethics CPE. Circular 230 isn’t just theory; it’s the backbone of every confident, compliant tax practice. Whether you’re reviewing engagement letters, verifying income or helping clients understand depreciation choices, ethics shape every decision you make.
Most credentialed preparers must complete at least two hours of ethics continuing education each year (required for enrolled agents and strongly encouraged for all preparers). It’s not just about checking a box; it’s about strengthening your professional judgment, client trust and peace of mind heading into filing season.
Why ethics matter more than ever
Circular 230 defines ethical practice as the standard of professionalism every preparer should strive for, from returning client records promptly to ensuring every signature represents accurate, supportable positions. NATP’s code of ethics builds on this foundation, highlighting fairness, confidentiality and integrity as essential to maintaining client trust and the profession’s credibility.
Ethical strength isn’t about avoiding penalties; it’s about earning confidence. When you understand your obligations under Circular 230, you’re equipped to spot potential issues early, handle them confidently and preserve the client relationships you’ve worked hard to build.
When client behavior tests your judgment
Ethics gets real when clients put you in tough spots. Imagine a trusted client of 20 years mentioning they’ve underreported significant income during a divorce. Circular 230 is clear: You’re not required to report the client, but you must promptly advise them of the issue, explain the consequences and recommend corrective steps. Your professionalism lies in guiding them toward compliance, not policing their behavior.
Or consider a taxpayer whose income seems conveniently calculated to maximize the earned income credit (EIC). If income is truly underreported, your due diligence requires you to decline preparing a fraudulent return and document your reasoning. If the client’s situation is legal but questionable, have an open conversation about the risks and ethical standards involved.
Even in smaller moments, like when a client insists their mileage or charitable deductions are accurate but won’t provide substantiation, the principle is the same. You can’t force compliance: The client ultimately decides what they want to report; but you decide whether you can ethically sign the return. Your role is to educate, document your recommendations and explain how unverified amounts may be disallowed or questioned later. At the end of the day, your integrity and clear communication protect both the client relationship and your professional standing.
Unscrupulous preparers hurt us all
The tax profession thrives on trust, and nothing undermines that faster than unethical practices. Each filing season, the IRS warns taxpayers about dishonest preparers who inflate refunds or promote credits their clients don’t qualify for. Recent examples include exaggerated employee retention credit claims and false filings for fuel tax credits.
While those stories make headlines, they also highlight why ethical practitioners stand out. By taking the time to verify documentation, explain credit eligibility and apply due diligence, you protect both your clients and the profession’s reputation. Every accurate, transparent return you file reinforces public confidence in the tax profession.
Ethics CPE hours reinforce that distinction. They don’t just help you meet requirements; they sharpen your ability to lead with integrity, spot potential fraud early and set the standard others in the field strive to match.
What's at stake for due diligence
Certain due diligence lapses now carry steeper penalties. For 2026, failing to complete Form 8867, Paid Preparer’s Due Diligence Checklist, for credits such as the earned income credit (EIC), child tax credit (CTC/ACTC/ODC), American opportunity tax credit (AOTC) or head of household (HOH) filing status can result in a $650 penalty per failure. That means missing all four due diligence requirements could result in a cost of up to $2,600 per return or claim.
But the real cost goes beyond dollars. Incomplete due diligence can lead to disallowed credits, accuracy-related penalties and even bans on claiming future credits. Ethics CPE courses walk through these exact scenarios, helping you strengthen your professional judgment, apply the right level of inquiry and avoid surprises once filing season heats up.
Ethical diligence isn’t extra; it’s the foundation of accurate, trusted work that builds client confidence year after year.
Make ethics your year-end win
Ethics CPE isn’t just a requirement; it’s an investment in your credibility. Each course strengthens your ability to recognize conflicts of interest, respond appropriately to client errors and balance advocacy with objectivity. The more complex tax practice becomes, with remote work, data security risks and artificial intelligence tools entering the mix, the more valuable ethical clarity becomes.
Completing your ethics hours before Dec. 31 ensures you start the new year ready to serve clients with confidence, not scrambling for compliance. It’s a chance to pause, reset and make sure your practice reflects the professionalism that drew you to this field in the first place.
Your integrity is your most valuable asset. Protect it, strengthen it and lead with it. When ethics guide your work, excellence follows.
Still wrapping up your 2025 ethics CPE? These NATP courses each offer 2 CPE with real-world guidance on ethics, due diligence and Circular 230 compliance.
About the author(s)
NATP Staff