NASE News

IRS Recommends New Requirements For Tax Return Preparers

In June 2009, IRS Commissioner Doug Shulman called for a comprehensive review of the paid tax return preparer industry, drawing on all relevant data and input from interested parties. The goal was to produce a comprehensive set of recommendations to better leverage the tax return preparer community, fostering higher compliance with the law by taxpayers and better service to taxpayers through higher standards of conduct by paid return preparers.

Based on this review, the IRS has announced a number of steps that it plans to implement for future filing seasons. These steps will not be in effect for the current 2010 filing season. The IRS’s January 4 recommendations include the following measures:

 - Requiring virtually all paid tax return preparers to register with the IRS and obtain a preparer tax identification number (PTIN). These preparers will be subject to a limited tax compliance check to ensure they have filed federal personal, employment, and business tax returns and that the tax due on those returns has been paid.
 - Requiring competency tests for all paid tax return preparers except attorneys, certified public accountants (CPAs) and enrolled agents who are active and in good standing with their respective licensing agencies.
 - Requiring ongoing continuing professional education for all paid tax return preparers except attorneys, CPAs, enrolled agents, and others who are already subject to continuing education requirements.
 - Extending the ethical rules found in Treasury Department Circular 230 to all paid preparers. Currently, these rules only apply to attorneys, CPAs and enrolled agents who practice before the IRS. This expansion would allow the IRS to suspend or otherwise discipline tax return preparers who engage in unethical or disreputable conduct.

The IRS’s recent review of the tax return preparation industry and its recommendations are highlighted in the full IRS report.

For more articles like these, visit the SBA Office of Advocacy blog.