Friday, May 28, 2010

Preparer Registration Update

David Williams, IRS Director of Electronic Tax Administration and Refundable Credits, provided some additional information regarding the preparer registration and testing requirements during a webinar he presented last week. Williams noted that the IRS still plans to roll out an online system where all preparers are able to register and obtain a PTIN this September. He also noted that the fees required would be somewhere between $75 and $300 for the three-year cycle, with an offsetting or reduced fee for enrolled agents. Enrolled agents are already subject to a $125 application and renewal fee.

When the online registration is initially launched, the IRS will not have the capability to automatically verify tax compliance and felony convictions. Instead, applicants will be asked to indicate under penalty of perjury whether they are current in their tax liability or if in the last ten years they have been convicted of a felony. Williams stated that an automatic compliance check may be implemented by mid-2011.

Williams also provided some detail regarding the competency exams, sharing that both exams will be open book and provided online. The identities and fingerprints of examinees would be verified by an on-site proctor similar to the process for taking the enrolled agents exam. One exam will cover Form 1040 wage and nonbusiness income and the earned income tax credit. The other exam will cover Form 1040 wage and small business income. Williams expects the exams to become available in May or June 2011. Preparers who obtained a PTIN prior to the availability of the exams will have three years to pass one of the two exams. Once the exam is available, preparers must pass an exam prior to obtaining a PTIN. Once preparers become registered, they will be required to complete 15 hours of continuing education each year, which must include at least three hours of federal tax law updates and two hours of ethics.

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