IRS to Regulate Preparers Not Already Subject to Oversight
WASHINGTON –– The Internal Revenue Service kicked off the 2010 tax filing season
by issuing the results of a landmark six-month study that proposes new registration,
testing and continuing education of tax return preparers. With more than 80% of
American households using a tax preparer or tax software to help them prepare and
file their taxes, higher standards for the tax 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.
To bring immediate help to taxpayers this filing season, the IRS also announced
a sweeping new effort to reach tax return preparers with enforcement and education.
As part of the outreach effort, the IRS is providing tips to taxpayers to ensure
that they are working with a reputable tax return preparer.
"As tax season begins, most Americans will turn to tax return preparers to help
with one of their biggest financial transactions of the year. The decisions announced
today represent a monumental shift in the way the IRS will oversee tax preparers,"
said IRS Commissioner Doug Shulman. "Our proposals will help ensure taxpayers receive
competent, ethical service from qualified professionals and strengthen the integrity
of the nation's tax system. In addition, we are taking immediate action to step
up oversight of tax preparers this filing season.”
Based on the results of the Return Preparer Review released today, the IRS recommends
a number of steps that it plans to implement for future filing seasons, including:
- Requiring all paid tax return preparers who must sign a federal tax return to register
with the IRS and obtain a preparer tax identification number (PTIN). These preparers
will be subject to a limited tax compliance check to ensure they have filed federal
personal, employment and business tax returns and that the tax due on those returns
has been paid.
- Requiring competency tests for all paid tax return preparers except attorneys, certified
public accountants (CPAs) and enrolled agents who are active and in good standing
with their respective licensing agencies.
- Requiring ongoing continuing professional education for all paid tax return preparers
except attorneys, CPAs, enrolled agents and others who are already subject to continuing
education requirements.
- Extending the ethical rules found in Treasury Department Circular 230 -- which currently
only apply to attorneys, CPAs and enrolled agents who practice before the IRS --
to all paid preparers. This expansion would allow the IRS to suspend or otherwise
discipline tax return preparers who engage in unethical or disreputable conduct.
Other measures the IRS anticipates taking are highlighted in the 55-page report
released today (see link below).
Currently, anyone may prepare a federal tax return for anyone else and charge a
fee. While some preparers are currently licensed by their states or are enrolled
to practice before the IRS, many do not have to meet any government or professionally
mandated competency requirements before preparing a federal tax return for a fee.
Read the complete press release
Read the full 55-page report