The IRS has issued significant policy changes in the 2010 tax season, for the tax preparers in the US, who help About 80 percent American households, in filing a tax return.
IRS feels, there is need for raising the competence threshold of the tax preparers.Therefore, there is a need for registration , testing and continued education of the tax preparers. Some of the important proposals are being enumerated below.
Good news for employees preparing their employer’s tax return.In such a case,the tax preparer is not required to sign as a paid preparer.There is no requirement to register and obtain a Preparer’s Tax identification Number(PTIN).
But in case a tax prepare has to file returns for other tax payers, as paid tax preparer,there is a requirement to register and obtain a PTIN number.
Accredited Council of Accountancy for Taxation(ACAT), credential holders will need to pass the IRS exam.
Attorneys, Certified public accountants and Enrolled agents will be exempt from testing and the preparer continuing education.
PTIN will be mandatory in future. But a PTIN can be obtained now. When the new online registration Starts, you will still need to register.
Tax preparers signing paid tax return will be levid a fee of $125, to register and obtain a PTIN.Attorneys, CPAs, and Enrolled agents would not be required to pay the separate testing fee, as they are exempt from testing .
Online registration is proposed to begin from Sept. 1, 2010.The proposed date for all paid preparers to be registered and use their PTIN is Jan. 1, 2011.
Testing will be implemented only after registration and allotment of PTIN’s is completed.
In the States of Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Hawaii, Idaho, Maine, Montana, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, and West Virginia , the LPA has the same rights and previllages as CPA’s they may not be required to test and enroll.
However in other states where LPA’s do not have the same privileges as CPA’s they will be required to test and enroll.
The practice of enrolled agents will not be limited.The practice of new category of paid tax preparers will be limited to preparation of tax returns.They also will be allowed to represent the tax payer , when the return they prepared, is under examination.
For detailed reading: Proposed New Requirements For Tax Preparers
New guidelines for tax preparers: New registration , testing and continued education requirements for Tax return preparers
