New Rules for Tax Preparers

New in 2013: all courses for Registered Tax Return preparers are voluntary.

 

As of 2010, all Registered Tax Return Preparers ( s) who are compensated for preparing federal tax returns are now subject to new requirements by the Internal Revenue Service.  Here are the Top 10 things you need to know about the new IRS requirements for Registered Tax Preparers.

1. When It Happened

While tax professionals were getting their tax season under way in January of 2010, the IRS was announcing a fundamental shift in the way they oversee tax preparers.  After conducting a 6 month study, the IRS proposed new standards for registration, testing and continuing  tax preparation education for all tax preparers.

2. Why There are New Requirements

The major push behind the new requirements is the protection of the taxpayer.  Before these new requirements, anyone could prepare a federal tax refund for anyone else and charge a fee.  The IRS’s new standards ensure that taxpayers will receive ethical, educated and competent service from quality tax professionals.  Required registration, testing and continuing tax preparation education will raise the standard of service, ultimately benefiting the taxpayer.

3. The New Requirements: Register – Get a PTIN

As of January 1, 2011, anyone who is paid to prepare income tax returns is required to have a Preparer Tax Identification Number (PTIN).  Your PTIN must be renewed every year and can be  done online or via paper application. For the purposes of the PTIN requirement, a tax return preparer is any individual who is compensated for preparing, or assisting in the preparation of, all or substantially all of a tax return or claim for refund of tax. (Reg. §1.6109-2(g))

4. The New Requirements: Test  – Take a Competency Test

The goal of the Registered Tax Return Preparer ( ) test is to establish basic preparer competency.  It focuses on the ethical responsibilities of registered tax preparers and completing Form 1040 series and the basic related forms and schedules.  This test must be taken and passed in order to be considered a Registered Tax Return Preparer.  The test is administered via computers at Prometric testing centers.

5. The New Requirements: Continuing Professional Education (CPE)

Beginning January 1st, 2012, every registered tax preparer must complete 15 hours of continuing education credits every year.  The general outline for the tax preparation classes is:

  • Ethics  (2 credit hours)
  • Current year tax law updates  (3 credit hours)
  • General tax preparation and updates  (10 credit hours)

*Make sure you are getting your tax preparation training through IRS approved continuing education providers, like My Tax Courses Online.

6. The Cost 

PTIN Test Continuing Education 

$64.25

            (Initial Registration)            

                        $116                            

$149

 $63

(Annual Renewal) 

 

 

 

7. Who is Exempt

PTIN Testing Continuing Education
An employee of a company who helps prepare tax returns, but does not sign as a paid preparer. Attorneys, Certified Public Accountants and Enrolled Agents who are active and in good standing with their respecting licensing agencies. Attorneys who are active and in good standing with their respecting licensing agencies.
e-File transmitters or intermediate service providers who do not prepare the tax returns. Those who do not prepare Form 1040 series returns. Certified Public Accountants who are active and in good standing with their respecting licensing agencies.
Attorneys and Certified Public Accountants who are active and in good standing with their respecting licensing agencies. Supervised preparers – those who do not sign returns, but are employed by Attorney or CPA firms. Enrolled Agents who are active and in good standing with their respecting licensing agencies.

 

8. The Deadline Dates

PTIN Test Continuing Education
Now December 31st, 2013 December 31st, 2012*
Your must have a PTIN to be compensated for preparing tax returns.   *15 hours of tax preparer courses are required every year.

 

9. The Penalties for Non-Compliance

Failure to comply with the PTIN rules could result in the imposition of Code Sec. 6695 penalties, injunction, referral for criminal investigation, or disciplinary action by IRS's Office of Professional Responsibility.

 

10. What You Need to Do Now

1

Register to get your PTIN* (or renew your PTIN for 2012).*You must have a PTIN in order to prepare income tax returns.You can register on the IRS website HERE

2

Register for your Continuing Professional Education courses*15 hours must be completed by December 31st, 2012! Make sure you register with an IRS approved continuing education provider like My Tax Courses Online!

3

Take your test – must be done by December 31st, 2013!

 

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