Washington, D.C. -- The Internal Revenue Service has released Revenue Procedure 2014-42 describing the details of its new voluntary tax preparer continuing education program, known as the Annual Filing Season Program.

The IRS announced the new program in early July after it lost a series of court decisions over the service's statutory authority to impose mandatory tax preparer testing and continuing education. Even before the IRS formally announced the new program, the American Institute of CPAs criticized the IRS's plans for voluntary tax preparer certification and warned it could be unlawful, and promptly sued to stop it after it was announced.

While there is no formal certification exam such as the now-cancelled one for the Registered Tax Return Preparer credential, tax preparers would have to take an annual refresher course administered by an IRS-approved continuing education provider. The refresher course would have to include a test of the material presented during the course and given at the end of the course. The test would have to be a minimum of 100 questions, and to successfully complete the refresher course, the applicant would have to answer at least 70 percent of the questions correctly. Those who meet the necessary education and testing qualifications would receive a "Record of Completion" from the IRS and be listed in the online database.

Attorneys, CPAs and EAs who are already covered by Circular 230 requirements would not be required to take the refresher course as a condition of eligibility to apply for a Record of Completion with the IRS. That also applies to individuals who have already passed the RTRP examination, and tax preparers who are licensed or registered by any state, territory or possession of the U.S., including a commonwealth, or the District of Columbia, after passing an examination covering federal tax matters, and tax return preparers who have passed an examination covering federal tax matters administered by an entity recognized by the IRS as an eligible entity.



Washington, D.C. -- The Internal Revenue Service plans to put in place new procedures starting next January to limit the number of refunds electronically deposited into a single financial account or pre-paid debit card to three, as part of an effort to combat fraud and identity theft, including fraud committed by unscrupulous tax preparers.

As part of the new procedures next tax season, the fourth and subsequent refunds automatically will convert to a paper refund check and be mailed to the taxpayer. In addition, taxpayers will receive a notice informing them that their account has exceeded the direct deposit limits and that they will receive a paper refund check in approximately four weeks if there are no other issues with the return. Taxpayers will still be able to track their refunds through the IRS's online Where's My Refund? tool.

The limit applies to financial accounts, such as savings or checking accounts, and to prepaid, reloadable cards or debit cards. The IRS cautioned that the limitation could affect some taxpayers, such as families in which the parent's and children's refunds are deposited into a family-held bank account. Taxpayers in this situation should make other deposit arrangements or expect to receive paper refund checks.



Washington, D.C. -- The Internal Revenue Service said that unused Individual Taxpayer Identification Numbers, or ITINs, will expire if they are not used on a federal income tax return for five consecutive years. The IRS will start de-activating ITINs in 2016.

The new policy applies to any ITIN, regardless of when it was issued. The IRS said about a quarter of the 21 million ITINs issued since the program began in 1996 are being used on tax returns. The new policy is intended to ensure that anyone who legitimately uses an ITIN for tax purposes can continue to do so, while at the same time resulting in the likely eventual expiration of millions of unused ITINs. The new policy was developed in consultation with taxpayers, their representatives and other stakeholders, and replaces one that went into effect on Jan. 1, 2013, in an effort to curb tax fraud, particularly by illegal workers.

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