The Internal Revenue Service recently launched an unprecedented effort to provide some oversight over the tax preparation industry, including Pennsylvania's 37,175 preparers.
Our intent is not to impose onerous mandates. Our intent is to stop the unqualified and unscrupulous from causing financial and emotional pain on the nation's taxpayers.
Most tax preparers do a fine job. They are dedicated to quality tax return preparation and are committed to quality service for their clients. But the actions of a few preparers cause lot of problems – for their clients, for preparers who follow the rules and for the IRS.
After months of study and after hearing from the industry, consumer advocates and taxpayers, the IRS earlier this year unveiled the Return Preparer Initiative. The first step of this long-term initiative is now underway.
Here's what we're doing:
· We are asking all paid tax return preparers to register with the IRS and obtain a new or renewed Preparer Tax Identification Number (PTIN.) The PTIN has existed for years as an optional ID number for tax preparers. Starting January 1, use of the PTIN will be mandatory. Preparers must use a new sign-up system at www.irs.gov/taxpros http://www.irs.gov/taxpros to get a valid PTIN. There is a fee, $64.25. We urge preparers to act today to get their ID numbers.
· Starting in mid-2011, the IRS plans to require that certain paid tax preparers pass a competency test. CPAs, attorneys and enrolled agents will be exempt from this exam because their professional requirements also include testing.
· The IRS also plans to require certain paid tax preparers to take 15-hours of continuing education courses annually beginning sometime in the future. Again, CPAs, attorneys and enrolled agents will be exempt because their professional requirements including continuing education.
· And lastly, the IRS will create a new designation for those paid tax preparers who obtain a PTIN, pass the test and take their education courses: Registered Tax Return Preparer. This future credential will signal to taxpayers a certain level of competency and qualification.
Sixty percent of taxpayers use a tax preparer. They deserve some peace of mind that the person they are paying to do their taxes has some degree of proficiency and has high ethical standards.
We believe these steps are neither difficult nor burdensome. These are minimum standards. But, they will serve to professionalize the industry and improve service to American taxpayers. If you are interested in more information, go to www.irs.gov/taxpros.
Mark William Hanson
IRS Media Relations (N.C./S.C.)
320 Federal Place, Greensboro, N.C.