IRS Will Ease Up On Some New Return Preparer Requirements

In an October 26 speech before the AICPA's Fall Tax Meeting in Washington, IRS Commissioner Doug Shulman revealed two important details about IRS's new return preparer initiative, which requires return preparers to meet new registration, competency testing, continuing education, and ethical standards:

(1) For the first year of implementation (namely 2011) IRS intends to waive the requirement for return preparers to meet continuing education (CE) requirements. Shulman said that the waiver will give IRS time to work through the many issues regarding CE, including working with third parties who already certify CE courses to attempt to leverage their infrastructure.

Observation: The CE requirement won't apply at all to attorneys, CPAs, enrolled agents, enrolled actuaries, or enrolled retirement plan agents due to their existing education requirements.

(2) One of the practitioner complaints about IRS's guidance was that in certain circumstances it requires PTINs to be obtained by non-signing individuals who work on tax returns under the supervision of a professional such as an accountant. (See New FAQs Shed Additional Light On New Tax Return Preparer Identifying Number Requirements, Final Regs Explain New Tax Return Preparer Identifying Number Requirements, and Regs Set User Fee To Apply For Or Renew Preparer Tax ID; Online Registration Up And Running) Acknowledging that "this is a tricky area," Shulman said that "it is highly likely that as we implement the new rules and procedures there will be some relief for testing and continuing education requirements for people who do not sign a return and work in a professional firm under the supervision of an accountant, enrolled agent or lawyer."

To read the full text of Mr. Shulman's speech, see Commissioner Of Internal Revenue Douglas H. Shulman's Keynote Speech Before The AICPA Fall Tax Meeting Washington, DC.

References: For who is a tax return preparer, see FTC 2d/FIN ¶S-1117; United States Tax Reporter ¶77,014.24; TaxDesk ¶867,002; TG ¶71753. For the return preparer penalty, see FTC 2d/FIN ¶V-2631; United States Tax Reporter ¶66,944; TaxDesk ¶867,019; TG ¶71769.