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IRS Paid Tax Preparer Requirements:
The IRS plan for tax preparer registration is scheduled to begin September 2010 and will affect nearly every professional tax preparer in some way. Paid tax preparers must register with the IRS to obtain a Preparer Tax Identification Number, pass an IRS exam and satisfy annual continuing education.
The definition of a professional tax preparer or paid tax preparer is as follows: all individuals, Attorneys, Certified Public Accountants and Enrolled Agents who are compensated for preparing, or assisting in the preparation of, all or substantially all of a federal tax return or claim for refund or who sign, or are required to sign, a federal tax return or claim for refund as a paid tax return preparer. Any individual falling under this category must obtain a Preparer Tax Identification Number (PTIN). All paid tax preparers must obtain a PTIN no later than December 31, 2010 in order to sign any federal tax returns or forms. The PTIN they obtain will be valid for three years. Testing of these preparers who hold a PTIN will not be implemented until after registration and mandatory PTIN usage are in place. Employees of a business who fill out their employers return will not be required to obtain a PTIN.
All paid tax preparers including Attorneys, Certified Public Accountants and Enrolled Agents who obtain a PTIN will potentially be placed within a national public database. Other information about which paid tax preparers and what information would be included is not yet available.
As of right now the only paid tax preparers who will not have to pass any kind of competency exam are Attorneys, Certified Public Accountants and Enrolled Agents. Paid preparers in states such as California, and Oregon who have to pass their own states’ individual criteria must still pass the IRS exam. Credential holders of organizations like the Accredited Council of Accountancy for Taxation (ACAT) will also have to pass IRS competency exams and take the continued competency testing. Across the board, regardless of any private or state accreditation, if you are not an Attorney, Certified Public Accountant or Enrolled Agent you must obtain a PTIN, pass the IRS competency exam, and take continued competency testing in order to be paid to prepare federal tax returns.
Attorneys, Certified Public Accountants and Enrolled Agents who prepare all or substantially all of a federal tax return or claim for refund will also have to obtain a PTIN and pay the fee associated with obtaining a PTIN. However, they will not be required to take any form of IRS testing or continued competency testing, if they are active and in good standing with their respective licensing agencies.
