Proposed requirements for professional tax preparers hold out the possibility that professionals might be required to pay for applying for and obtaining identification numbers, the PTINs that are a key part of new regulations proposed by theWhile the agency envisions continuing education requirements would probably produce costs for firms only a small percentage of small entities would have to radically alter business practices or go out of business.
The changes are part of a program that the IRS said is necessary to ensure better quality preparation services and to reduce poor or unethical practices. The proposals are open for comment until April 26, CPAs, tax attorneys and enrolled agents would be exempt for the requirement for additional continuing education and minimum competency examinations that would be mandated for other professional preparers. But they would not be exempt from possible fees, which might be paid more than once if the numbers expire periodically.
There will be a transition period this year during which preparers about to user Social Security numbers or PTINs for returns or claims filed before January 1. After that date, SSNs cannot be used and preparers must used a PTIN or will be subject to penalties unless they can prove the cause was due to reasonable cause, not to willful neglect. PTINs may have expiration dates and preparers who fail to renew lapsed registrations would also face possible discipline. The IRS left its options open by stating that preparers and staffs would have to have a PTIN or other prescribed ID number.
When they apply for PTINS preparers may be subject to initial and periodic checks of whether they have filed and paid personal and business taxes on time or made arrangements with the IRS subject to an approved installment agreement.
The IRS provided examples to demonstrate which firm employees might be subject to filing for a PTIN. A staff member who answers telephone calls, makes copies and enters data into tax software would not need a number. But an employee who determines the amount and character of entries on returns and whether the information provided is sufficient for preparing returns for another person would need to obtain a number, whether a PTIN or other designation that might be required.
Reviewers would have to get PTINs while a tax expert whose advice was sought on a specific item in a return, for example a tax credit, would not.
