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Nonprofits Is Your Tax Preparer Registered With The IRS


									It is an unfortunate reality: many self-described tax professionals are
not professionals at all. They are more than willing to take a customer's
money for "professional" work that often results in a nightmare situation
for the taxpayer. This includes those who advertise services to help
nonprofits with IRS Form 1023, the application for 501(c)(3) status or
with Form 990, the annual return filed by nonprofits.Several years ago,
as a means of better regulating the paid tax preparer community and
protecting the taxpaying consumer, the IRS introduced the Preparer Tax
Identification Number, or PTIN, program. This voluntary program required
the preparer to register with the IRS and obtain a PTIN that the preparer
would then use as part of their signature on a tax return they prepared.
Starting in 2012, the PTIN program is no longer is
required of all paid preparers. In fact, it is now against the law for a
tax preparer to charge a fee if that preparer has not yet obtained a
PTIN.So what does this mean for taxpayers? One important change is the
criteria for obtaining and keeping a PTIN: testing and continuing
education. In the past, anybody could print up business cards or throw up
a website and call themselves tax professionals. No more! A paid preparer
who is not a CPA, attorney, or Enrolled Agent must first pass a
competency exam, then submit to 15 hours of continuing professional
education each year in order to maintain their status.It is important to
point out that relying on the services of a non-registered preparer could
cause serious headaches for your nonprofit. While any penalties would be
assessed against the fraudulent preparer, the nonprofit itself could be
subject to intense IRS problems or even audit.Another important point is
that the IRS is going to be on the lookout for rogue preparers who will
try an end-around on the rules. They recently published the following
advice:Some unscrupulous preparers may attempt to elude the new oversight
program by not signing returns they prepare. Taxpayers should never use
tax return preparers who refuse to sign returns and enter PTINs. In an
effort to identify these "ghost preparers," the IRS later this year also
will send letters to taxpayers who appear to have had assistance with
their returns but lack tax return preparer signatures... The goal of the
letters is to protect taxpayers by ensuring that all paid federal tax
return preparers are registered with the IRS, and sign tax returns they
prepare and use an identifying number when required to do so.There is
never a substitute for relying on the services of a competent
professional. Now more than ever, make sure the person or company you are
paying to assist your nonprofit is qualified to help you. The risk is
simply too great not to.

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