New Guidelines for Paid Tax Return Preparers

New Guidelines for Paid Tax Return Preparers

At the same time each year, millions of taxpayers visit tax professionals to file their federal tax return. A tax preparer will customarily charge a fee for this type of service. However, after considerable input from the public, the Internal Revenue Service has created a set of regulations that all paid-preparers must begin to follow.


Currently, there are lax rules in place that govern paid income tax preparers. The lack of standards has created several issues for individuals seeking out a preparer. In many cases, a consumer will pay a regular person that does not have any formal education to process their income tax return. When an unqualified individual is permitted to prepare a tax return, a taxpayer could potentially submit erroneous information to the Internal Revenue Service. If there were any problems with the calculations of the return, the taxpayer would be held responsible. Consequently, hefty fines and penalties may apply.

New Guidelines

As of January 1, 2011, the Internal Revenue Service will require every paid-preparer to possess a Preparer Tax Identification Number (PTIN) that must be entered on every generated income tax return. The process of obtaining this number is two-fold:

Enroll Electronically – To start the process, each individual that would like to provide paid tax return preparation services will have to enroll.A� The annual fee for a PTIN is $64.25.A� The process must also be completed by individuals that already posses a PTIN.

Examination – In order to measure educational experience, the Internal Revenue Service will require each candidate for a PTIN number to complete a competency examination. For those individuals that already possess a PTIN number, they will have until December 31, 2013 to pass the exam in order to retain their number. New preparers will be able to secure a PTIN once they have passed the assessment beginning in the second half of 2011.

Continuing Education – To ensure that each holder of a PTIN remains up to date on the latest changes in tax laws, the Internal Revenue Service will require each PTIN holder to complete a minimum of 15 hours of continuing education every year beginning in 2012 or later.

These new guidelines allows the public to know that a specific individual or business tax preparer is duly authorized to furnish these tax services, as taxpayers will have the ability to ask the preparer for their PTIN prior to having the return completed.A� Ensuring that the public is given proper tax preparation services is a top priority for the Internal Revenue Service.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.