In May of 2008, the Internal Revenue Service began reviewing tax preparation companies to determine whether or not an increase in oversight was necessary for tax preparers who charge money for preparing tax returns. After an long 8-month review, including not just study of tax preparers and their actions, but also laws both federal and at the state level, the Internal Revenue Service delivered an anaylsis in October of 2008 recommending increased oversight for tax preparation companies including individual tax preparers.
Increased regulations were set forth in early 2009 and demands for tax preparation companies to register, test, enroll in industry education, and pay fees towards the new tax oversight directives. In September of this year, the Internal Revenue Service put forth new regulations with regards to the new need for more checks and balances including minor adjustments for all service providers.
Here are some of the requirements from personal to professional.
Individual tax preparers
Every tax return prepared and filed will have to include a Preparer’s Tax Identification Number (PTIN) on all return forms.With these new regulations,individual tax preparers must register for and obtain a PTIN. Registration mandates the completion of a disclosure statement . Once both of these items are received, the the Internal Revenue Service will assign a PTIN.
Accounting firms, tax preparation companies
In some cases, it’s easy to determine who will require PTINs and who doesn’t. Although, in a wide range of scenarios, it can be hard to judge when referring to someone preparing a tax return.
The new rules should give an idea of which individuals need to register for PTINs, based on realistic cases based around a single tax return.
Enrolled agents, registered tax preparers
Certification and base CPE mandates are relatively clear for Enrolled Agents and Registered Tax Preparers.Taking this into consideration, the rules are a lot harder to figure out once the specific details are carefully studied.
In today’s terms, it is hard to figure out whether the same CPE rules and regulations for Enrolled Agents work for Registered Tax Preparers and all other sub categories.
The new regulations for businesses that specialize in Tax Preparation Services are very important because of the endless number of consumers who hire independent tax preparers every tax season. Additionally, thousands of firms hire non-CPA preparers who work for them during the busy tax season and they will have to know all about the new rules to figure out exactly who must comply with exams and CPE.