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Friday, January 14, 2011

Paid Return Preparer Categories - More

The new IRS program to requires paid tax return preparers to register for a Preparer Tax Identification Number (PTIN) and pay a fee, has added some complication to the tax law for some preparers. The IRS most likely believes that the added complication will still be worthwhile if it all improves tax administration and compliance.

In early 2011, the IRS released Notice 2011-6 which exempts some preparers who are not CPAs, attorneys or Enrolled Agents, from the requirement to pass a test and obtain a certain type and amount of continuing education each year. This is welcome relief for CPA firms concerned about whether they would not be able to have interns/future CPAs be involved with tax preparation without having to pass a test.

I have an article that summarizes the categories within which a tax return preparer must fall to be able to file any return for pay. Notice 2011-6 also modifies the PTIN rule in specifying some returns fro which if a person only prepares those returns, they will not need a PTIN. The list includes such returns as W-2s and 1099s.

Here is a link to the article - Yet More Paid-Return Preparer Categories!, AICPA Tax Insider, 1/13/11.

What do you think about this new system of regulating paid return preparers in terms of tax administration?

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