The Internal Revenue Service has issued proposed regulations requiring paid tax preparers to furnish an identification number on tax returns and claims for tax refunds that they prepare.
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The proposed regulations provide guidance on how the IRS will define the identifying number. Additional provisions provide that tax return preparers must apply for and regularly renew their preparer identifying number.
The regulations propose that for tax returns or refund claims filed after Dec. 31, 2010, the identifying number that a tax return preparer must include with the preparers signature on tax returns and refund claims the number prescribed by the IRS in forms, instructions or other guidance.
Tax return preparers will not be able to use a Social Security Number as a preparer identifying number unless specifically prescribed by the IRS in forms, instructions or other guidance. Instead, a tax return preparer would be required to use a PTIN as the identifying number unless the IRS prescribes in the future a replacement to the PTIN.
The IRS is inviting comments on the proposal.
Taxpayer Advocate Nina Olson has recommended that the IRS require preparers to use a unique Preparer Tax Identification Number on all returns (see Taxpayer Advocate to Focus on Tax Preparer Regulation). The IRS has also stepped up efforts to regulate tax preparers, especially those who are not already governed by Circular 230 requirements.