Archive for PTIN
IRS Reminds Paid Tax Preparers to Register Now for PTINs
Posted by: | CommentsThe following is a press release from IRS.gov:
WASHINGTON — As year end approaches, the Internal Revenue Service today strongly encouraged paid tax return preparers to register now for their new or renewed Preparer Tax Identification Numbers (PTINs) to avoid any last-minute rush.
Starting Jan. 1, 2011, use of the PTIN will be mandatory on all federal tax returns and claims for refund prepared by a paid tax preparer. Individuals who, for compensation, prepare all or substantially all of any federal tax return or claim for refund must use PTINs. Paid preparers must apply for a new or renewed PTIN through the new sign-up system at www.irs.gov/taxpros.
“We urge you to register now if you plan on preparing tax returns in 2011. The holidays are approaching and it may be tempting to let this slip,” said David R. Williams, leader of the new Return Preparer Office. “Our advice is to register now. It takes 15 minutes, and you’re done. Over 380,000 preparers have registered so far.”
Any preparer who obtained a PTIN prior to the new sign-up system launch on Sept. 28, 2010, must apply again. Generally, preparers with existing PTINs will be permitted to retain their existing numbers if the information they provide during the sign-up process matches what the IRS currently has on file.
The PTIN is a nine-digit number that preparers must use when they prepare and sign a tax return or claim for refund. Previously, PTIN use was optional in place of the preparer’s social security number. Mandatory use of the PTIN is part of a broader effort by the IRS to regulate the tax return preparation industry and improve services for taxpayers.
The following is a press release from the IRS:
WASHINGTON — The Internal Revenue Service has started sending out more than 10,000 letters to tax return preparers nationwide to remind them of their obligation to prepare accurate tax returns on behalf of their clients.
Also, during the 2011 filing season, IRS representatives will visit approximately 2,500 tax return preparers who received these letters to further discuss their responsibilities as a return preparer and to verify their compliance with existing requirements.
The tax agency is sending the letters to paid preparers who completed tax returns in which the IRS has identified common errors. The letter includes an enclosure that reminds tax return preparers of their responsibilities and consequences of filing incorrect returns.
While most return preparers are professionals who provide honest and excellent service to their clients, some make basic errors or engage in fraud and other illegal activities. The IRS will continue to work closely with the Department of Justice to pursue civil or criminal action as appropriate.
The IRS urges taxpayers to be careful when choosing a preparer. Reputable return preparers will ask to see receipts and will ask multiple questions to determine whether expenses may be claimed as deductions or otherwise qualify for favorable tax treatment. By doing so, they are trying to help their clients avoid penalties, interest or additional taxes that could result from an IRS examination.
These letters and planned visits are another step in increased IRS efforts to heighten awareness of preparer responsibilities and to ensure paid tax return preparers are assisting taxpayers appropriately. The IRS is continuing its efforts to implement the recommendations IRS Commissioner Doug Shulman announced in January following a comprehensive six-month study of the tax return preparer industry.
Reminder of New Registration Requirement for All Return Preparers
The IRS recently launched a new online application system to obtain a Preparer Tax Identification Number (PTIN). All paid tax return preparers who prepare all or substantially all of a tax return are required to use the new registration system to obtain a PTIN. Individuals who obtained a PTIN prior to Sept. 28, 2010, need to reapply under the new system but generally will be reassigned the same number.
Applicants must pay $64.25 to obtain or renew a PTIN. Access to the online system is available through the Tax Professionals page on this website. Receipt of a PTIN will be immediate after successful online registration. Alternatively, a paper application may be submitted on Form W-12, IRS Paid Preparer Tax Identification Number Application. Preparers choosing this alternative can expect a response time of four to six weeks.
For more, see the Tax Professionals page on this website, which features step-by-step instructions and multiple FAQs on the new registration system.
New Online Registration System for Paid Tax Return Preparers is Now Available
Posted by: | CommentsThe following is a news release from the IRS Media Relations Office
IR-2010-99, Sept. 28, 2010
WASHINGTON — As part of an initiative to ensure that tax return preparers are competent and qualified, the Internal Revenue Service today issued final regulations requiring paid tax return preparers to register with the IRS to obtain a Preparer Tax Identification Number (PTIN). A new online application system to obtain a PTIN is now available.
All paid tax return preparers who prepare all or substantially all of a tax return are required to use the new registration system to obtain a PTIN.
Access to the online application system will be through the Tax Professionals page of IRS.gov. Individuals who currently possess a PTIN will need to reapply under the new system but generally will be reassigned the same number.
“Getting a new, industry-wide registration system in place is essential to our efforts to improve the standards and oversight of tax return preparation,” said IRS Commissioner Doug Shulman. “These efforts are essential to the future of the nation’s tax system. This will create higher standards for the tax preparation community and ensure quality service for taxpayers.”
The IRS set up a special toll-free telephone number, 1-877-613-PTIN (7846), that tax professionals can call for technical support related to the new online registration system.
Applicants will pay a $64.25 fee to obtain a PTIN, which will be valid for one year. As part of that fee the IRS will receive $50 per user, as authorized by final user fee regulations issued by the IRS today, to pay for technology, compliance and outreach efforts associated with the new program. And a third-party vendor will receive $14.25 per user to operate the online system and provide customer support.
Receipt of a PTIN will be immediate after successful online registration. Or a paper application may be submitted on Form W-12, IRS Paid Preparer Tax Identification Number Application, with a response time of four to six weeks. Before registration, applicants should consider that the date the PTIN is assigned is established as the annual renewal date.
Individuals without a Social Security number will also need to provide one of the following: Form 8945, PTIN Supplemental Application for U.S. Citizens Without a Social Security Number Due to Conscientious Religious Objection, or Form 8946, PTIN Supplemental Application for Foreign Persons Without a Social Security Number.
The new online registration system and final regulations are part of a series of steps underway to increase oversight of federal tax return preparation.
In January, Shulman announced the results of a comprehensive six-month review of the tax return preparer industry, which proposed new registration, testing and continuing education of federal tax return preparers. With 60 percent of American households using a tax preparer 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. Currently, many return preparers do not have to meet any government or professionally mandated competency requirements before preparing a federal tax return for a fee.
Work on Testing, Continuing Education Components Continue
The start of the PTIN registration process begins as the IRS continues to review the testing and education components of the return preparer initiative as recently announced in proposed regulations that would amend Treasury Circular 230.
The proposed Circular 230 regulations announced that attorneys, certified public accountants and enrolled agents would not be subject to additional testing or continuing education requirements in order to obtain a PTIN. These professionals are currently subject to strict professional standards of conduct and ethics.
Pending finalization of guidance, the IRS has under serious consideration extending similar treatment to a discrete category of people who engage in return preparation under the supervision of someone else — for example, some employees who prepare all or substantially all of the return and work in certain professional firms under the supervision of one of the above individuals who signs the return.
The IRS will provide guidance defining this area in the coming months, and will continue to seek feedback during this process to help ensure the creation of a fair, equitable oversight system that minimizes burden.
On the continuing education requirements, the IRS recognizes the need to have transition rules in place and plans to issue additional guidelines by the end of the year.
For more, see the Tax Professionals page on IRS.gov, which features an FAQ page on the new registration system and who needs a PTIN.
IRS Releases Proposed Regulations Regarding Fees for Preparer Tax Identification Numbers
Posted by: | CommentsThe Internal Revenue Service has released proposed regulations that would establish a fee for individuals who apply for a preparer tax identification number (PTIN). 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 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. Tax professionals and other interested parties have until Aug. 23, 2010, to submit comments regarding the proposed regulations.There is a hearing on these proposed regulations scheduled for August 24.
Click here for the full IRS text of the rules.
