IRS Restricts Use of Term ‘Registered Tax Return Preparer’

The Internal Revenue Service has issued a notice restricting the use of the term “registered tax return preparer” until tax preparers can be officially tested and checked.

Notice 2011-45 sets forth the restrictions on the term. The IRS also issued TD 9527 containing final regulations governing practice before the IRS for tax preparers. To become a registered tax return preparer, an applicant must pass a competency examination and tax compliance and suitability checks.

The IRS has selected a vendor to develop and administer the competency examination, but the examination is not yet available. In addition, the IRS is currently in the process of developing the suitability check. Because the conditions for becoming a registered tax return preparer are not yet able to be satisfied by any individual, no individual may represent that he is a registered tax return preparer. An individual with a provisional Preparer Tax Identification Number, or PTIN, may not represent that he is a registered tax return preparer or has passed the competency examination. Once the competency examination is available, only an individual who has met all of the conditions to becoming a registered tax return preparer, including passing the competency examination and the tax compliance and suitability checks, may represent that he is a registered tax return preparer.

The IRS also noted that Section 10.30 of Circular 230 will be amended to require a registered tax return preparer using any paid advertising involving print, television or radio, in which the individual represents himself or herself to be a registered tax return preparer, will be required to display or broadcast the following statement: “The IRS does not endorse any particular individual tax return preparer. For more information on tax return preparers go to IRS.gov.”