Taxation & Estate Planning

TAX PREPARERS, PREPARE TO BE REGULATED

By Charles Rubin

In the regulatory state that is the United States of America, more and more occupations are subject to regulation by some government body. The time has come to add paid tax return preparers to the list.

The IRS has issued the results of a study that proposes registration, testing, and continuing education requirements for paid tax preparers. Elements of this initiative that are likely to be rolled out in future filing seasons include:

1. Paid tax return preparers who signed a federal tax return will be required to register with the IRS and obtain a "preparer tax identification number." This will assist the IRS in tracking the bad eggs.

2. Paid tax return preparers will have to pass competency tests.

3. Paid tax return preparers will have ongoing continuing professional education requirements.

4. The ethical rules in Circular 230 will be extended to preparers.

Luckily, for those of us that are attorneys, CPAs, and enrolled agents, the competency testing and ongoing professional education requirements will not apply to us, since we are already subject to competency and continuing education requirements.

The IRS is also advising that approximately 10,000 paid tax return preparers can expect to receive letters from the IRS, noting that they have prepared a large volume of tax returns with errors on them, and encouraging them to be vigilant in areas where the errors are frequently found. Several thousand of these preparers can also expect to receive a visit by IRS Revenue Agents for a sitdown discussion about these issues.

News Release 2010-1, 01/04/2010

Full post as published by Rubin on Tax on January 05, 2010 (boomark / email).