Heres some good news for those who havent renewed their Preparer Tax Identification Number by the end of the year. The process to renew it will be the same beginning in January as it is now, and it takes only about 15 minutes to do online.
Sixty percent of all returns in this country are done by paid preparers, said David R. Williams, head of the new Internal Revenue Service Return Preparer Office. Our goal is to get a better handle on who is doing returns and how theyre doing it.
Beginning in January, anyone who prepares a return for compensation is required to use a PTIN. Filing a return as a paid preparer using the preparers Social Security number is legal through the end of the year, but not afterwards, said Williams.
If you file using your SSN, you can expect to hear from us, he said in a conference call with reporters on Wednesday. The call was designed to get the word out to preparers who are not yet aware of the impending mandate.
Were concerned that there is a whole group of seasonal return prepares who are right now beginning preparation for the upcoming filing season, and were not sure they are aware of this requirement, he said. Although hundreds of thousands have already received or renewed their PTIN under the registration process, the IRS really doesnt know how many preparers there are, Williams indicated.
We know that there are thousands of people who are hard working and do honest tax returns, he observed. But there is evidence that there are preparers who are unscrupulous or not competent. The unscrupulous ones prepare a return and collect cash, but then disappear. This not only hurts taxpayers, it hurts other preparers. So the basic point is that return preparers need to get these [PTIN] numbers, and taxpayers need to make sure their preparer has the number.
Williams emphasized that the IRS would not reject returns signed by a preparer without a PTIN. This is about getting preparers to comply, he said. We dont want to put the burden from this on the taxpayer.
There are still some issues to be resolved, including who is a tax preparer. Nevertheless, both the National Taxpayer Advocate and the Government Accountability Office have supported a preparer regulation regime for years. The oft-cited example is that you need a license to be a barber in most states, but you can prepare a tax return something more intrusive, and more consequential even than a bad hair day without the taxpayer, the IRS, or anyone else knowing who you are or where to find you.
Although there have been some misgivings on the part of some professional organizations, by and large they all, including the American Institute of CPAs, support efforts to rein in the rogue preparers who detract from the profession and harm individual taxpayers. After all, something which raises the lower end of a profession can only help, not hurt, the profession as a whole.