Independent Accountants Association of Michigan

July 28, 2010

lRS Releases Proposed Fees for TPINs

   Regs Must Still be Approved . . . 9/1 Implementation 'Iffy'
   CPE Requirements Delayed . . . Testing Revised

Proposed regulations that were issued in March would require certain tax return preparers to obtain a PTIN. The IRS is working to finalize those proposed regulations, which are the first of a series of steps planned to increase oversight of federal tax return preparation.

The proposed regulations (REG-139343-08) would establish a fee of $50, payable to the IRS, to cover technology costs, as well as compliance and outreach efforts associated with the new PTIN program.

The proposed regulations would also provide for an additional fee (expected to be substantially lower than $50) to be charged by the third-party vendor chosen to operate the new online system. That fee amount is expected to be announced soon, as well as additional details about the launch of a new online application system. These fees could change in future years as program costs are reevaluated.

Agencies are directed by the Office of Management and Budget (OMB) to charge user fees to recover the cost of services that convey special benefits beyond those available to the general public, such as the authority to prepare federal tax returns for compensation.

Tax professionals and other interested parties have until Aug. 23, 2010, to submit comments regarding the proposed regulations. The official publication date of these proposed regulations is July 23.

In January, IRS Commissioner Doug Shulman announced the results of a comprehensive six-month study of the tax return preparer industry, which proposed new registration, testing, and continuing education of tax return preparers.

With more than 80 percent of American households using a tax preparer or tax software to help them prepare and file their taxes, higher standards for the tax return preparer community will significantly enhance protections and service for taxpayers, increase confidence in the tax system and result in greater compliance with tax laws over the long term.

How to Learn More

The IRS recently broadcast the topic “New Requirements for Tax Return Preparers – Learn the Who, What, When and How” on the webinar IRS Live, an educational program for tax professionals. View the archive on IRS.gov.

Tax professionals can also learn more by attending one of six tax forums this summer around the country hosted by the IRS. The IRS Nationwide Tax Forums are three-day events that provide tax professionals with the most up-to-date information on federal and state tax issues.

The IAAM will be announcing webinar dates in late August to further explain the new tax preparer regulations. Our hope is the regulations will be finalized by that time so our members know exactly what to expect and do to comply.

The latest information from the IRS indicates that the effective date for the requirement that registered return preparers maintain 15 hours of continuing education has been delayed.

The initial information stated that paid preparers would be subject to the continuing education requirement beginning on January 1, 2011, or on the date they registered, whichever was later. The effective date for the continuing education requirement has yet to be officially determined but IRS sources say it could be another year before the requirement becomes effective.

Testing Requirement for Registered
Return Preparers Seems to be Revised . . .

The IRS has updated its frequently asked questions (FAQs) on its website as they pertain to the testing requirements for paid preparers. Initially, the IRS indicated that paid preparers who prepare only payroll returns would be required to take the 1040 nonwage business competency exam.

The FAQs have been revised to state that at this time, testing will only apply to those preparers who prepare at least one 1040 series return.

Future guidance will be issued once testing is implemented for those preparers who only prepare other types of non-1040 returns.

As always, the IAAM will keep you updated and current on this important issue as we represent your interests!