New Requirements For Federal Tax Return Preparers

June 15, 2010 | Guest Author | 0 Comments

new tax preparation requirements

The following is a guest blog post by Keith Grant, Manager, Sales Training at PrimePay.

Did you know that beginning in 2011, any tax return preparers, who prepare Federal tax returns for compensation, will be subject to new requirements? 

The proposed new requirements for tax return preparers include registration, testing and continuing education. According to the IRS website "These initiatives will take time to implement and are not yet in effect. Proposed and final regulations are necessary for implementation of many of these recommendations, and further information will be available as these are developed."

So what are the benefits of doing this? The IRS states that "With more than 80 percent of American households using a tax preparer or tax software, higher standards for the tax preparer community will significantly enhance protections and service for taxpayers, increase confidence in the tax system, and result in greater compliance with tax laws over the long term."

Here's an explanation of the requirements from the IRS website:

  • All paid tax return preparers must sign-up with the IRS, pay a registration fee, and obtain a preparer tax identification number (PTIN).
  • Those who already have a PTIN, must still sign-up under the new process.
  • Competency tests will be required for all paid tax return preparers except attorneys, certified public accountants (CPAs) and enrolled agents who are active and in good standing with their respective licensing agencies.
  • Continuing professional education of 15 hours per year for all paid tax return preparers except attorneys, CPAs and enrolled agents.
  • Tax compliance checks for all tax return preparers.
  • Extended Circular 230 ethics standards to all preparers.

The IRS provides several ways to learn about these new requirements...

Tags: CPA, tax return preparation