The notice, issued by the IRS on Monday, provides guidance about the standards of conduct that must be met by a tax return preparer to avoid a penalty for an understatement of tax that may result from a position taken on a tax return.

"It is important to note that the regulations expected to be finalized in 2008 may be substantially different from the rules described in this notice, and in some cases more stringent," the IRS notice said.

The IRS guidance applies to large companies such as Jackson Hewitt Tax Service and H&R Block Inc as well as to private attorneys and accountants who prepare tax returns.

A tax preparer may rely in good faith upon information furnished by the taxpayer or another adviser or third party, and is not required to independently verify or review the items reported on tax returns to determine if they are likely to be upheld if challenged by the IRS, the agency said. However, the tax return preparer must make "reasonable inquiries" if the information appears to be incorrect or incomplete, it said.

The IRS notice also asked accountants, industry groups, consumer groups and the public to submit comments by March 24 on how the agency should define "tax return preparer" in its overhaul of regulations.