The Internal Revenue Service has released a set of proposed regulations expanding the list of tax return preparers who may obtain and renew a Preparer Tax Identification Number.
The proposals incorporate provisions from a notice issued last year, Notice 2011-6, which provides for two additional categories of tax return preparers who can obtain a PTIN, namely, certain supervised tax return preparers and preparers who prepare tax returns and claims for refund that are not covered by a competency examination.
In the first category, the proposed regulations provide that any individual 18 years of age or older is eligible for a PTIN if the individual is supervised as a tax return preparer by an attorney, CPA, enrolled agent, enrolled retirement plan agent, or enrolled actuary authorized to practice before the IRS under Circular 230. The proposed regulations provide that the supervision must be in accordance with any requirements the IRS may prescribe, currently set forth in Notice 2011-6.
As for the second category, the proposed regulations provide that any individual 18 years of age or older is eligible for a PTIN if the individual exclusively prepares tax returns and claims for refund that are not covered by any minimum competency test or tests that the IRS prescribes for registered tax return preparers. To be eligible for a PTIN, an individual must certify, at the time and in whatever manner the IRS may prescribe, that the individual only prepares tax returns and claims for refund that are not covered by a minimum competency test. Under the proposed regulations, the individual must also comply with any other eligibility requirements that the IRS may prescribe, which are currently set forth in Notice 2011-6.
The IRS is accepting comments on the proposed regulations. They can be sent electronically via the Federal eRulemaking Portal at www.regulations.gov (IRS REG-124791-11).
15 Comments
You guys are looking at 6/11 regs and 230, try 10/11 "final" regs and now the "new final regs in 230" and you just might see that the government just wants control of EVERYONE-SEE OBAMACARE. The whole point is not to insure lack of competence, it is a set up for destroying competition and the AICPA loves it because it kills the right to life, liberty and the pursuit of happiness, i.e. how to unemploy honest people-draft new regs. I simply cannot condone this given that I did what most cannot, passed the CPA exam. That does not mean I don't want to repair the incompetent returns, I get those all the time. I fix the problems and make a few bucks doing so. But, forget one 230 item and look out, you have just been exposed to penalties that are absurd when we are forced to rely on information given us by taxpayers, not audit them as the government is trying to make us comply.BTW,Anyone know what a listed or transaction of interest is?
Posted by: BRES | February 20, 2012 3:12 PM
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Bottom line: Only one person signs a return. H&R Block does not generally have non-signing preparers for 1040 series returns. If you read the definition of non-signing preparer you will find that input on how to treat a complex transaction that is over a certain threshold on the overall return may create a non-signing preparer for that portion of the return. Those lobbying for this have been AICPA and CPA firms that do tax work. Small and large CPA firms routinely have "staff accountants" who are non-signing preparers who help put together parts of or all of returns that are then signed by someone who looks over them and has the ability to grasp the big picture. "Staff accountants" at CPA firms just H&R Block's employees may have accounting degrees and even Master of Accountancy degrees and know what "pooling of interests" is. We also know it is not seen very often any more because those grandfathered in have mostly faded away. That is probably an item best left for a non-signing preparer.
Posted by: EnrolledAgent | February 15, 2012 10:45 PM
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I concur. Lobbyist in action again. Subject legitimate preparers to 230 regs and allow HR and JH to continue with the non experienced. Who believes with the high volume that each return or preparer is properly reviewed or supervised?
Posted by: mmmm | February 15, 2012 10:02 PM
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To all, please accept my sincere apologies. I thought the people here were real Accountants, not Obama Socialists. If I recall from my 25+ years experience, it is capitalism which gave us the compliance work (regardless of when and how) and now a bunch of EA's and enrolled preparers that could not do a return by hand with pencil and paper and no calculator to save their lives. But, Circular 230 will save the tax world. Just wait until you get fingerprinted to e-file (how much sense does that make?) and then get sanctioned since 14+- Senior Cabinet Level appointees owe collectively ove $800,000.00, including Geithner the genius moron who helped get us in the mess we are now facing. None of this has to do with making certain anyone is competent-it is just another inalienable right being taken again (see "item of interest" in 230 revision 10/11), sounds too much like person of interest (where you get locked up because you are interesting). WAKE UP!!!!!!!!!!!
Posted by: BRES | February 15, 2012 5:23 PM
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Just to clear up any confusion, here's the list of forms in Notice 2011-6 that the IRS says are not subject to the requirements of S1.6109-2. An individual must obtain a PTIN to prepare for compensation all or substantially all of any form except those specifically identified by the IRS as not subject to the requirements of S1.6109-2: Form SS-4, Application for Employer Identification Number; Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding; Form SS-16, Certificate of Election of Coverage under FICA; Form W-2 series of returns; Form W-7, Application for IRS Individual Taxpayer Identification Number; Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding; Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment; Form 872, Consent to Extend the Time to Assess Tax; Form 906, Closing Agreement On Final Determination Covering Specific Matters; Form 1098 series; 9 Form 1099 series; Form 2848, Power of Attorney and Declaration of Representative; Form 3115, Application for Change in Accounting Method; Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits; Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners; Form 4419, Application for Filing Information Returns Electronically; Form 5300, Application for Determination for Employee Benefit Plan; Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans; Form 5310, Application for Determination for Terminating Plan; Form 5500 series; Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips; Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests; Form 8288-B, Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests; Form 8508, Request for Waiver From Filing Information Returns Electronically; Form 8717 User Fee for Employee Plan Determination, Opinion, and Advisory Letter Request; Form 8809, Application for Extension of Time to File Information Return; Form 8821, Tax Information Authorization; Form 8942, Application for Certification of Qualified Investments Eligible for Credits and Grants Under the Qualifying Therapeutic Discovery Project Program
Posted by: MikeCohn | February 15, 2012 5:14 PM
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Ok - have any of you visited the portal?
Can't even figure that out - what a waste of time. All of this.
Anyone figures it out please let me know. Thanks
Posted by: Lenore | February 15, 2012 5:13 PM
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Is anyone posting here a CPA? If so, you may have determined that this 230 stuff is ABSURD. I too want to save the world from incompetent preparers, but I also know this is just one more small step backwards for those of us who passed the CPA exam, first try, pencil & paper, no calculators, with items including consolidations (pooling of interests no less) using 13 column paper and making appropriate adjustments for minority interests acquired throughout the year, and weighted average number of shares outstanding with splits and stock dividends, to add one MORE large step for Obama Socialism (see Obamacare). I would be willing to wager that none of you could pass the exam as I did. My proposal is simple, put things back where they were 25 years ago and let us self regulate-I think we have regulated this country into near bankruptcy and you guys are all for it? I apologize, but I just do not understand the desire to capture the clientele of the "incompetents", but I know I probably would not want them, as they went to those types for a reason, not by competence.
Posted by: BRES | February 15, 2012 5:06 PM
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I am confused - so far the only testing is on individual returns.
Is this a way to allow corporate returns to be done? This makes even less sense as bad corporate returns (esp S corps) can lead to even worse personal returns.
What genius made this proposal? I am leaving my comments at the portal right now.
Posted by: Lenore | February 15, 2012 5:02 PM
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What am I missing.....In order to efile a return, I was told I had to have an EFIN number in addition to the PTIN number. Part of the process included a background check and I had to be finger-printed. What good will the PTIN number be when all returns will have to be efiled in the near furture?
Posted by: Eakinjd1234 | February 15, 2012 3:48 PM
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As I read this new approach regarding the intent of the IRS to allow unscrupulous and incompetent preparers continue to drag out the little resources that are left to hard, ethical, and well rounded professionals in the field, I have become cold. In my area this year, the stealers have been enraged by the attempt made by the IRS to get rid of them through examination, criminal background checks, and obtaining a PTIN. They stole more identities, filed more false tax returns in defying the IRS in its efforts to improve the system. Now, if the IRS puts a lenient note on the strenghtening regulations, there is no hope for us, the professionals to make a living and especially to protect the public just it was intended to be in the first place. My question is this: Why do the authorities make it so hard for us to become educated professionals and they let those unscrupulous and incompetent guys get rich for free so easily? What is going on here? Is it preferrable that people turn their back on schools and learn how to use a software to slash individuals income, increase their whitholdings, add education credits, claim first time home buyers credit and split the resulting refunds with those so called taxpayers who did not even work throughout the year? My expectations are for the IRS to enforce the new rules whitout any leeways because it is about time that I start breathing from this vague of stealings from the government for more than a decade and I start being proud to make a buck from the profession I so love but I am being compelled to abandon if there no change soon. Yes, we can change it and make it a safer environment to do business.
Posted by: fritzjseide@gmail.com | February 15, 2012 1:02 PM
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I agree with all you guys. This article reads as if the IRS is back-peddling on their PTIN regulations. I was very pleased that tax preparers would be held to a high standard of competency. However, this "new" set of rules appears to be undoing whatever good was to be accomplished by the PTIN rules. My sympathy lies with the consumer. Where is their protection against idiot tax preparers? I truly believe that only COMPETENT tax preparers should be allowed to complete tax returns, and that can only be accomplished through education. Whether by CPE's or certified tax professionals.
Posted by: StAlice | February 15, 2012 9:52 AM
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What the heck are "tax returns and claims for refund that are not covered by a minimum competency test??????????" Here I thought the new preparer rules would weed out the frauds, and allow us (competent & professional preparers) to enjoy what little is left of the tax prep market...and now this! The corner store travel agent/jack of all trades is back in the tax prep business! Would lawyers stand for one of their revenue steams being constantly erroded? I think not. The laws insure that there will always be a need for them. Silly nonsense!
Posted by: jcozz | February 15, 2012 8:50 AM
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They should stick to the rules...The idea was to set standards, get rid of felons, dishonest tax preparers, preparers that owe the IRS, preparers that have a criminal record.....What is going on with people.
Posted by: NOSAENZ | February 15, 2012 8:10 AM
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The fact that someone is paid to prepare a tax return suggests a certain level of competency; therefore, how would someone that prepares a return for money not be covered by a competency examination?
Posted by: rratex | February 15, 2012 8:03 AM
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It appears that the whole new set of rules and regulations are a 'farce'. Stick to the new rules by not allowing felons in prison to have the number to file returns. The whole idea was to set standards to get rid of felons, dishonesty, and people that do not abide by the rules and regulations. It appears that H and R Block, Jackson Hewlett, etc have gotten to the rule makers as usual.
Posted by: bell1194 | February 15, 2012 7:27 AM
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