Can an EA prepare a new return if a prior error is unfixed?

Sometimes, but not if the new return would repeat or depend on a position the EA knows is wrong. Prior-year errors often affect later returns through basis, depreciation, losses, credits, retirement-account reporting, or other carryforward items.

If the current return can be prepared accurately without relying on the incorrect prior-year item, the EA may be able to continue after documenting the advice. If the current return needs the corrected amount, the EA should obtain supportable corrected information or decline the affected work.