Platinum Professional Services is here for you every step of the way. As part of our commitment to offer you the best in education, this page is designed to help make the transitions easier for you with the new IRS changes. Please check back periodically as we will be updating it.
The IRS plans on implementing an enforcement strategy for the 2011 tax season. The Franchise Tax Board enforcement program, which CTEC is under, will remain intact for California. All CTEC registered tax preparers will be required to complete the IRS and CTEC requirements in order to be legally qualified to prepare state and federal returns. Remember the FTB and the IRS share information, be sure your registration is up to date with both.
All CTEC and Oregon registered tax preparers will have to complete both the IRS requirements and their state requirements. CTEC will still be requiring 60 hours of qualifying education to become a CTEC registered tax preparer. and Oregon will still require qualifying education as well. CTEC presently requires 20 hours of continuing education (12 hours federal, 4 hours state, 2 hours ethics and 2 hours either federal or state). CTEC has indicated that the 15 hours of federal continuing education will be allowed for the 20 hour requirement additional hours will have to be completed for the CA component. Oregon presently requires 30 hours of continuing education. Oregon will follow the same quidelines as CTEC. Once paid preparers register, they will be subject to the 15-hour per year continuing education requirement. The IRS plans to base the completion of the required continuing education on the preparer’s registration anniversary date as opposed to a calendar year for everyone. The starting date for the IRS Continuing Professional Education CPE requirement is January 1st, 2012.
The following are the IRS requirements for Tax Preparation:
1. The IRS will require all paid tax preparers to sign up with the IRS, pay a registration fee and obtain a preparer tax identification number (PTIN). All paid preparers will be required to register and obtain a PTIN or they cannot prepare returns for compensation. Under the proposed regulations, the requirement to sign up on the new system will apply to all compensated tax return preparers of federal tax returns regardless of whether they currently possess a PTIN. Tax return preparers who already have a PTIN generally will be reassigned the same number. Compensated tax return preparers would pay a $64.25 user fee the first year for a PTIN based on two underlying costs. The IRS proposes to collect $50 per user to pay for outreach, technology, and compliance efforts associated with the new program. And the third-party vendor will receive $14.25 per user to operate the online system and provide customer support. Click here to access to an online sign-up system.
2. Beginning in November 2011, tax return preparers must pass a competency test to officially become a registered tax return preparer. Tax return preparers who have PTINs will have until December 31, 2013 to pass the competency test and may take the test an unlimited number of times to pass it. There will be a fee to take the test and that fee will be due each time the individual attempts to pass the test. The IRS test specifications identify the major topics that will be covered by the test, which will be available starting this fall. Although individuals who already have a provisional preparer tax identification number (PTIN) from the IRS do not have to pass the exam until December 31, 2013, they may take the exam at any time once it is available. The test will have approximately 120 questions in a combination of multiple choice and true or false format. Questions will be weighted and individuals will receive a pass or fail score, with diagnostic feedback provided to those who fail. Some reference materials will be available to individuals when they are taking the test. Prometric will provide individuals with Publication 17, Form 1040 and Form 1040 instructions as reference materials.
Test vendor Prometric Inc. worked with the IRS and the tax preparer community to develop the test. Platinum Professional Services was involved in providing Prometric with the development of the test. The time limit for the test is expected to be between two and three hours. The test must be taken at one of the roughly 260 Prometric facilities nationwide.
The fee for the test is $116.00, which is separate from the PTIN user fee. Currently there is no limit on the number of times preparers can take the test, but they must pay the fee each time. Individuals must pass the test only once.
Only certain individuals who prepare the Form 1040 series are required to take the test. Attorneys, Certified Public Accounts and Enrolled Agents (EAs) are exempt from testing and continuing education because of their more stringent professional testing and education requirements. Also exempt are supervised employees of attorneys, CPAs, attorneys or EAs who prepare but do not sign and are not required to sign the Form 1040 series returns they prepare and individuals who prepare federal returns other than the Form 1040 series.
Approximately 730,000 return preparers have registered and received PTINs in 2011. All tax preparers will need to renew an existing PTIN or obtain a new PTIN beginning in October 2011.
Tax Preparers who have on-line accounts at www.irs.gov/ptin can use their accounts to schedule a test time and select a Prometric site.
All preparers who obtain a PTIN will have until December 31, 2013, to pass the IRS competency exam. The test is part of an ongoing effort by the IRS to enhance oversight of the tax preparation industry. Preparers who pass this test, a background check and tax compliance check as well as complete 15 hours of continuing education annually will have a new designation: Registered Tax Return Preparer. Currently, tax Ppeparers who have a PTIN have a Provisional PTIN.
3. The IRS will require continuing professional education of 15 hours per year for all paid Tax Return Preparers (except Attorneys, CPA's, Enrolled Agents) Enrolled Agents have separate requirements click here to learn more. The IRS will require the 15 hours to include three hours of federal tax law updates, two hours of tax preparers ethics and 10 hours of federal tax law topics. The starting date for the IRS Continuing Professional Education CPE requirement is January 1st, 2012. Again, Tax Preparers who have a PTIN have a Provisional PTIN will still need to complete continuing education in 2012, before you are allowed to renew their Provisional PIN in 2012.
Platinum Professional Services will combined the Federal requirements and the CTEC requirements so you can meet all your tax education needs in one course.
4. The IRS will conduct Tax Compliance checks on all tax return preparers (i.e. if they have filed their personal and business returns etc.).
5, The IRS will extend Circular 230 ethics standards for all preparers. This will be included in the 15 hour continuing educational requirement.
6. Certain tax return preparers who must pass a suitability check will have to provide their fingerprints so that a Federal Bureau of Investigation database search can be conducted. Generally, the fingerprint requirement will affect those preparers who currently have provisional PTINs. The IRS also published proposed regulations ( REG-116284-11 ) that would establish user fees for fingerprinting and taking the competency examination. As proposed, the IRS portion of the fingerprinting fee would be $33, and the IRS portion of the testing fee would be $27. These user fees are in addition to any fees charged by the third-party vendors administering the programs. The fees to be charged by third-party vendors are not being announced at this time, but the total fees, including the IRS user fees, are expected to be between $60 and $90 for fingerprinting and $100 and $125 for testing.