On 1/4/2010, the IRS issued the following "recommendations" or "proposals" to regulate tax preparers. It will take a few years to implement all of these proposals. In the meantime, CTEC regulations remain in full force and effect so tax preparers in California must continue to comply with state registration requirements. Federal ID number & registration All individuals who sign a federal tax return as a paid tax preparer will be asked to obtain a Preparer Tax Identification Number (PTIN) by 12/31/2010. The PTIN will be the exclusive number used to identify any tax preparer submitting returns to the IRS; The IRS is currently setting up a national registration system which is expected to go online 9/1/2010. When the system goes online, preparers will be asked to register with their PTIN. Tax preparers who do not register with the IRS by 12/31/2010 will be fined $25 for each return filed on or after 1/1/2011; CTEC registered tax preparers will not be exempt from the IRS registration requirement; The IRS will make tax preparer registration effective for three-year periods and will require tax preparers to renew their registration every three years. Competency examination Within three years, the IRS will implement competency testing for all paid tax return preparers required to register with the IRS who are not attorneys, certified public accountants or enrolled agents; CTEC registered tax preparers will not be exempt from the IRS competency examination requirement; There will not be any “grandfathering” from these testing requirements based upon past tax return preparation experience; Tax return preparers will be given three years from their initial registration date to pass the required examinations (discussed below). Also, tax return preparers testing during this initial implementation period may attempt to pass the examination as many times as the examination is offered, provided that the applicable fee is paid for each attempt; Initially, the IRS will offer two competency examinations: One examination will cover wage and nonbusiness income Form 1040 series returns; another examination will cover wage and small business income Form 1040 series returns. The IRS plans to add a third test to address the competency of the tax return preparer with regard to business tax rules after the three-year implementation phase is completed. Continuing education Beginning 2011, the IRS will require 15 hours of annual continuing professional education for tax return preparers who are required to register (California Tax School's 20-hour course will satisfy both CTEC and IRS requirements); Tax return preparers will be required to self-certify the completion of continuing education at the time of registration renewal. The IRS will perform random checks to verify compliance. Take the course with CTECRenewals.com to meet the requirments with both CTEC and IRS. More Information Visit the IRS at http://www.irs.gov/taxpros/article/0,,id=210909,00.html |
