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IRS’s Tax Return Preparer
Registration Program
January 4, 2011
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Background
IRS conducted comprehensive review of tax return
preparers in 2009 and released Publication 4832, Return
Preparer Review in January 2010
Goals of Service’s preparer review initiative:
• Increase tax compliance
• Ensure preparers are knowledgeable, skilled and
ethical
CPAs, attorneys, enrolled agents, preparers who do not
work on 1040 series returns & certain non-signing
preparers exempt from testing and continuing education
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. Registration and PTINs
9/28/10 - Final PTIN & user fee regulations released
$64.25 user fee for PTIN applications or renewals
After 12/31/10, preparers must have registered, obtained
PTIN before preparing returns
12.30/10 – Guidance released on scope of competency
exam and non-signing preparer requirements and tax forms
that do not require a PTIN
Tax return or claim for refund must be signed and PTIN
furnished; EIN also if appropriate
• Section 6695(c) penalty applies
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Who Has to Register for a PTIN?
Any individual who prepares or assists in preparation of
“all or substantially all of a tax return…” including
• “non-signing preparers”
• preparation in conjunction with a sales transaction or
purchase of goods or services
Must be compensated
• No PTIN required to work as VITA volunteer
Rev. Proc. 2010-41 covers foreign tax preparers and U.S.
persons without SSN
All preparers subject to suitability checks
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“All or Substantially All”
Determining factors
• Complexity of the work performed
• Amount of items of income, deductions or losses
attributable to work performed relative to entire return
• Amount of tax or credit attributable to work performed
relative to the entire return
Preparation of form, statement or schedule (such as
Schedule EIC) may constitute preparation of all or
substantially all of return or claim for refund
Need to use professional judgment in making
determination
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. PTIN Exemptions
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. Non-Signing Preparers
Answers phone, makes copies, etc; exercises judgment
on data fields in tax software to use, but “does not
exercise any discretion or independent judgment…”
Interviews clients and “determines the amount and
character of entries on the return…”
Consults with an individual who is a “subject matter
expert” on a recently enacted corporate tax credit
Other examples found in FAQs
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. Supervised Non-Signers Exempt
from Continuing Education and Test
Notice 2011-6 (Dec. 30, 2010) exempts non-signing preparers
from continuing education and competency exam who are:
- Supervised by a Circular 230 practitioner who signs the tax
return or refund claim; and
- Employed at a CPA firm, law firm, or “other recognized firm” of
the signing preparer
They must also pass the IRS tax compliance check and, after it
becomes available, the suitability check
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. Other Requirements Regarding
Non-Signing Preparers
Cannot represent Must comply with
taxpayers before subpart B of
the IRS, sign a Circular 230 and Must be 18 years
return, or represent subject to old to obtain PTIN
themselves as a revocation of PTIN
registered preparer for violations
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Rev. Proc. 2010-41
Foreign preparer must complete:
Additional Form W-12 due
Online PTIN
documentation the later of
application; or
must be 1/31/11 or 10 days
Form W-12 and
submitted with after first return
Form 8946
Form 8946 prepared
User fee
Form 8946 within Proper
submitted at time
60 days of online compliance
online
application or covers returns
registration or
submitting paper filed through
submission of
Form W-12 10/31/11
Form W-12
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Proposed Modifications to Circular 230
Indicates preparation or filing of document with IRS
may constitute practice before IRS
Describes the process for becoming a registered tax
return preparer (RTRP)
Provides RTRPs with limited practice rights
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Proposed Modifications to Circular 230
Signing RTRPs may
Practice as RTRP limited to
represent some taxpayers
preparing returns, other
in IRS examination of
documents
return or claim for refund.
Modifications
RTRPs not permitted to
in IRS examination of represent taxpayers before
return or claim for refund Appeals, Counsel,
collections or similar office
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Designation as a
Registered Tax Return Preparer
Director of Office of Professional Responsibility (OPR) may
designate an individual as an RTRP provided applicant:
• Demonstrates • Possesses a • Has not
competence current or engaged in
in Federal tax valid PTIN any conduct
matters by that would
written justify
examination suspension
or disbarment
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. Application to Become a
Registered Tax Return Preparer
As a condition, IRS may conduct Federal
application tax compliance and suitability check
Tax compliance check - Suitability check – whether
whether applicant has filed applicant has engaged in
all required individual and any conduct justifying
business tax returns, and suspension or disbarment
made proper arrangements (including disreputable
for payment of tax liabilities conduct)
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. Application to Become a
Registered Tax Return Preparer
Temporary Once application
recognition to is approved, RTRP
practice may be Provides appeal must have current
granted after rights when an and valid
determining application has registration card
whether applicant been denied or certificate; and
should be granted current and valid
status as RTRP PTIN certificate
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Proposed Circular 230 Continuing
Education (CE) Requirements
15 hours CE per year (condition of renewal) with minimum:
• three hours - Federal tax updates
• two hours - Tax-related ethics
• ten hours - Federal tax topics
CE providers must obtain OPR approval for each program
CE not required for 2011
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Testing
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PTIN Assistance
IRS FAQs:
http://www.irs.gov/taxpros/article/0,,id=218611,00.html
Primary Toll Free: 877.613.PTIN (7846)
TTY: 877.613.3686
Toll Number for International Callers:
319.464.3272
Hours of Operation: Monday-Friday,
8:00am - 5:00pm (CST)
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