The IRS Has Issued New Requirements For Professional Tax Return Preparers
Professional tax return preparers should note the Internal Revenue Service’s issuance of new requirements for registration, continuing education, competency testing, ethics compliance and electronic filing.
Beginning in 2011 anyone preparing tax returns for a fee will be required to register and obtain a preparer tax identification number. Annual registration will be required and there will be a registration fee. Preparers that already have preparer tax identification numbers will be required to register again under the new system. The new online registration process should be available beginning in September 2010.
Beginning sometime near the middle of 2011, tax professionals will be required to pass a competency exam to obtain their preparer tax identification number. Attorneys, Certified Public Accountants and enrolled agents will be exempt from the competency exam requirement.
Return preparers will also be required to complete 15 hours of continuing education. The 15 hours of CPE must include 3 hours of federal tax law updates, 2 hours of ethics and 10 hours of other federal tax law. These requirements take effect in 2011. The continuing education requirement will not apply to attorneys, Certified Public Accountants, enrolled agents, enrolled actuaries or enrolled retirement plan agents because of their existing continuing education requirements.
As of January 1, 2011 all preparers will be subject to the standards of conduct set by Treasury Department Circular 230. In addition, attorneys, Certified Public Accountants and enrolled agents will be authorized to prepare tax returns and represent tax payers before the Internal Revenue Service. Other registered tax return preparers will be authorized to prepare tax returns but their authority to represent tax payers will be limited to returns they have prepared.
Professional tax return preparers will also be subject to new electronic filing requirements. Beginning in 2011, anyone preparing 100 or more individual or trust returns will be required to file them electronically. In 2012, anyone preparing 11 or more individual or trust returns will be required to file electronically.
Contact the Internal Revenue Service or visit for the specific requirements on filing procedures, filing deadlines and fees.