Form 8939
On August 5th, the IRS released guidelines for treating estates of taxpayers who died in 2010. The information is designed to help executors opt out of estate tax in order to apply carryover rules. These individuals are to use Form 8939 which is due on November 15, 2010.
The recent press release declares that executors must file Form 8939, Allocation of Increase in Basis for Property Acquired from a Decedent, in order to avoid the estate tax so that the new carryover basis rules apply. Form 8939 and all corresponding instructions will be released early this fall.
According to the IRS press release, “Under the Economic Growth and Tax Relief Reconciliation Act of 2001, the estate tax was repealed for persons who died in 2010. However, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reinstated the estate tax for persons who died in 2010. This recent law allows executors of the estates of decedents who died in 2010 to opt out of the estate tax, and instead elect to be governed by the repealed carry-over basis provisions of the 2001 Act. This choice is to be made by filing Form 8939.”
Offshore Account Reporting
The 2011 Offshore Voluntary Disclosure Initiative (OVDI), designed to help taxpayers hiding income in offshore accounts make their taxes current with the IRS, will expire on August 31, 2011. Taxpayers coming forward voluntarily will experience a less stringent penalty than those who wait for the IRS to discover their undisclosed accounts and income. With new reporting requirements being initiated over the next few years, taxpayers will find it increasingly more difficult to hide income in offshore accounts.
IRS Commissioner Doug Shulman explained, “The time has come to get back into compliance with the U.S. tax system, because the risks of hiding money offshore keeps going up. Our goal is to get people back into the system. The second voluntary initiative gives people a fair way to resolve their tax problems.”
Originally announced on February 8th, the 2011 OVDI Offshore Disclosure Program (OVDP) is similar to the one initiated in 2009, offering benefits that encourage taxpayers to disclose their offshore accounts and incomes rather than face higher penalties and possible criminal charges. In the 2011 initiative, taxpayers will have to pay a 25% penalty on the amount hidden in foreign accounts in the year with “the highest aggregate account balance covering the 2003 to 2010 time period.” Penalties may be lower for eligible taxpayers.
Those who choose to comply must also pay back-taxes and interest for up to eight years and well as other possible penalties. In order to be eligible for OVDI, original and amended returns must be filed by August 31, 2011.
For more information, refer to a previous post on this site, or visit IRS.gov.
Universal Accounting’s Tax Training
If you would like to become eligible to prepare taxes under the new regulations established by the IRS, consider enrolling in Universal’s online tax training. Not only could you earn the Professional Tax Preparer Designation, but you could also learn everything you need to know to pass the IRS Competency Exam and receive up to 60 CPE credits, depending on the number of modules you complete.
Be prepared for recent changes that are impacting all paid tax preparers. Call UAC at 1-877-833-7909 to enroll our online tax training today and improve your competitive advantage and secure your professional standing in the tax industry while building a strong home-based tax business.
We welcome your feedback and comments. Please post!
On July 12th, the IRS announced a recent discovery that approximately 100,000 tax preparers submitted returns in 2011 while failing to comply with new requirements. The oversight program, designed to regulate preparer conduct and monitor the tax return preparation industry, is sending letters to all noncompliant tax preparers.
Last year the IRS instituted new regulations requiring paid tax preparers to obtain Preparer Tax Identification Numbers (PTIN) which were to be included, along with their signatures, on each return they prepared.
IRS Commissioner Doug Shulman explains, “The vast majority of federal tax return preparers complied with the rules. Obviously, some preparers did not get the word, so these letters provide additional information so they can register as soon as possible. We owe it to the compliant tax preparers to make sure that everyone is on a level playing field.”
The IRS asks taxpayers to ensure that their tax preparers are in compliance and can complete returns with a valid PTIN. The IRS suspects that some “ghost preparers” are assisting taxpayers with their returns while refusing to sign the forms and provide PTINs. Later this year the IRS will be sending letters to those taxpayers as well, suggesting they file complaints on noncompliant paid tax preparers.
The IRS reports that since instituting the new requirements, approximately 712, 000 preparers have registered and obtained their PTINs. Preparers who are not CPAs (Certified Public Accountants) or EAs (Enrolled Agents), must also pass a competency exam and suitability check and complete 15 hours of continuing education credits each year.
In a recent press release, the IRS explains, “Compliance is a central part of the new tax return preparer initiative and the letters are one step in an ongoing compliance effort to ensure tax return preparers are following the new regulations. The IRS also is working to identify tax return preparers who make repeated errors and IRS personnel have had face-to-face meetings with thousands of these tax return preparers over the past two years.”
We welcome your comments on new IRS regulations and what that means to the tax preparer industry.
Increase Your Options and Your Earning Potential
If you haven’t yet secured your PTIN in compliance with new IRS regulations on paid tax preparers, now is the time. Also consider Universal your source in preparing for mandatory testing and continued tax education these regulations also require.
Our online income tax training, the Professional Tax Preparer program, is designed to help and includes the following:
- Informative video instruction
- Full 1040 training
- Full business return (1065, 1120, 1120S) training
- 6 months of follow-up support from expert tax preparers
Many programs will lecture you on tax law and preparation practices, but Universal’s program is much more effective because it provides you with the hands-on practice that will perfect your skills. Theory is taught as guiding principles, but the focus is on actually doing taxes to gain proficiency.
Ensure that you’re in compliance with the new IRS tax preparer regulations. Improve your competitive advantage and secure your professional standing in the tax industry while building a solid home-based tax business. Call Universal at 1-877-833-7909 today and enroll in the Professional Tax Preparer Program.
It’s that time of year again when the National Taxpayer Advocate’s mid-year report is submitted to Congress. This year Nina Olson, current United States Taxpayer Advocate and head of the National Taxpayer Advocate Office (TAS), addressed her concerns regarding IRS lien filing practices as well as the affect of IRS budget cuts on taxpayer service and compliance.
IRS Collection Practices
A concern noted in previous reports, Olson reiterates a need to address problems in the IRS’s lien filing practices. While recently announcing changes in their collection policy, particularly making lien withdrawals available to a wider range of taxpayers, Olson still finds the IRS’s practice of automatically filing tax liens based on a dollar threshold concerning. She suggests such decisions only be made following an analysis of these taxpayers’ financial situations. She explains that this approach “should balance the need to protect the government’s interest in the taxpayer’s assets with a corresponding concern for the financial harm the lien will create for that taxpayer.”
Impact of Budget Cuts on Taxpayer Service and Compliance
Recent changes in tax benefits, including the Economic Stimulus Payments, First-Time Homebuyer Credit, and Making Work Pay, have proven more difficult to claim than anticipated, generating a host of taxpayer inquiries that often go unanswered. The IRS’s ability to satisfactorily respond to these questions has significantly declined. Compared to fiscal year 2004, the percentage of unanswered correspondence increased by 135 percent in 2010.
Olson expressed apprehension over budget cuts that will negatively impact an already straining taxpayer service. She explains, “In recent years, the IRS has been given more and more tasks, but it is not receiving the resources it needs to fulfill these tasks without cutting corners. And when the IRS cuts corners, taxpayers can be harmed and revenue collection may suffer.”
As in the past, the National Taxpayer Advocate suggests the Internal Revenue Service be exempt from budget caps or reductions, noting that the IRS has, on average, been able to collect $194 dollars for each dollar it spends.
The report states, “Despite differing views about the appropriate level of taxation, there is widespread agreement that taxes that are due and owing under the law should be collected. Spending cuts mean the IRS will not have the resources to ensure that all taxpayers pay their fair share, thereby effectively forcing compliant taxpayers to pay more to subsidize noncompliance by others. Moreover, the IRS will not have the ability to meet the service needs of the taxpayers who are paying our nation’s bills.”
Other Areas of Concern
- Taxpayer Impact of Possible Government Shutdown. Currently, in the event of a government shutdown, the IRS’s contingency plan does not make any allowance for the protection of taxpayers’ lives or property, an oversight the Taxpayer Advocate suggest amending.
- Tax Reform and Tax Complexity. The National Taxpayer Advocate is still requesting feedback from the public regarding tax simplification. To participate in this conversation, submit your comments to their electronic suggestion box found at the TAS website.
Universal Accounting Helps Tax Preparers Succeed
At Universal believe it’s important to prepare for the future, and we’re interested in seeing your future success as a tax preparer. Our Professional Tax Preparer Program is designed to help professionals like you master tax preparation, becoming efficient in the completion of individual and business returns. If you would like to learn more, visit Universal for a free video today!
We welcome your feedback on this article! Please post your comments below.
Resource
–. “National Taxpayer Advocate Submits Mid-Year Report to Congress; Identifies Priority Challenges and Issues for Upcoming Year.” 29 June 2011 IRS.gov
On June 23rd, the IRS announced that the optional standard mileage rates would increase for the months July through December 2011. This new rate is 55.5 cents per mile, a 4.5 increase from the rates previously used. Taxpayers use this standard to calculate deductible costs for operating an automobile for business purposes. It is also used by many businesses and the federal government to calculate the mileage costs when reimbursing employees.
The change comes after a significant increase in gas prices this past few months. IRS Commissioner Doug Shulman explained, “This year’s increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices. We are taking this step so the reimbursement rate will be fair to taxpayers.”
However, gasoline isn’t the only element used to calculate the standard mileage rates; depreciation, insurance and other fixed and variable costs are also included. The rate for calculating deductible medical or moving expenses has also increased from 19 cents per mile to 23.5 cents. The rate used for charitable organizations stays at 14 cents, an amount determined by statute and not the IRS.
In a press release posted to their website, the IRS reminds taxpayers they “always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
For more information, visit www.irs.gov.
As always, we welcome your feedback!
Universal’s Tax Training Will Prepare You for the 2011 Tax Year
Tax professionals charge 100 + an hour providing planning and preparation services to clients. In the course of one tax season, many tax preparers earn what others take an entire year to bring in. Universal’s Professional Tax Preparer (PTP) Program will enable you to help your clients save enough money in taxes to more than cover your fees. And what you earn in one tax season will more than cover the registration fee for this course.
Become a Professional Tax Preparer (PTP) before next tax season. Universal’s PTP program will not only give you hands-on training in completing full individual (1040) and business returns, but it will also enable you to be in compliance with new IRS regulations. Celebrate the end of tax season by investing in training that will enable you to increase your knowledge and skills. Call 1-877-833-7909 and enroll in the Professional Tax Preparer program now!
Resource
–. “IRS Increases Mileage Rate to 55.5 Cents per Mile.” 23 June 2011 IRS.gov
Spring 2011 SOI Bulletin Released
On June 14th the IRS announced that the spring 2011 edition of the Statistics of Income Bulletin is currently available. The Statistics of Income (SOI) Division publishes the bulletin on a quarterly basis and includes data gathered from tax returns filed most recently.
The spring issue includes information on tax returns filed in 2008 by individuals earning high incomes. Taxpayers with adjusted gross incomes of $200,000 or more filed over 4 million returns, representing only 3% of the total returns filed that same year. The IRS noted that articles on the following topics can also be found in this edition:
- Individual income tax data, by age of taxpayer. For tax year 2007, individual income taxpayers filed approximately 143 million returns. Of those, 27.1 million were filed by taxpayers who were ages 35 to 44, the most returns filed by any age group in that year.
- Individual income tax data, by state. Individual income taxpayers from Connecticut reported the highest average adjusted gross income (AGI) in the United States for tax year 2007. Connecticut was the only state for which average AGI exceeded $90,000.
- Foreign recipients of U.S. income. For tax year 2008, U.S. source income payments to foreign persons totaled $659.7 billion. Eight countries, including the United Kingdom, Cayman Islands, Germany, Japan, Switzerland, Canada, France and the Netherlands, accounted for almost 67 percent of all income paid to foreign persons.
- International boycott reports. For tax year 2008, 138 U.S. entities received about 3,700 requests to participate in boycotts unsanctioned by the United States.
- Gift tax returns. Individuals filed almost 235,000 federal gift tax returns to report $40.2 billion in assets transferred during 2008.
You can access your own copy of the SOI Bulletin at the IRS website. For more information on accessing a hardcopy for your files, refer to the corresponding press release.
Tax Deadline Nears for Tax Breaks and Filing Deferrals
In other tax news, the June 30th deadline is quickly approaching for completing some important time-sensitive tasks. As noted by the NACPB, these tasks include “amending cafeteria plans to conform with the Patient Protection and Affordable Care Act (PPACA) requirements; filing Forms TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), by individuals with signature authority over but no financial interest in the accounts for 2010 and earlier years; and claiming the first-time homebuyer credit for certain service members. Additionally, June 30th is the date on which the 0.2% FUTA surtax is scheduled to expire.”
For more information on each of these, visit the NACPB website.
Universal’s Tax Training Will Prepare You for the 2011 Tax Year
Tax professionals charge 100 + an hour providing planning and preparation services to clients. In the course of one tax season, many tax preparers earn what others take an entire year to bring in. Universal’s Professional Tax Preparer (PTP) Program will enable you to help your clients save enough money in taxes to more than cover your fees. And what you earn in one tax season will more than cover the registration fee for this course.
Become a Professional Tax Preparer (PTP) before next tax season. Universal’s PTP program will not only give you hands-on training in completing full individual (1040) and business returns, but it will also enable you to be in compliance with new IRS regulations. Use your summer vacation to increase your knowledge, skills and income. Call 1-877-833-7909 and enroll in the Professional Tax Preparer program now!
What tax news do you want access to? Post your feedback in our comments section.
On June 1st, the IRS announced the opening of the 2012 Low Income Taxpayer Clinic (LITC) grant application process. The LITC program awards matching grants of up to $100,000 each year to qualifying organizations looking to launch, grow or maintain a low income taxpayer clinic; interested tax preparers should act now!
The grant cycle begins in January 1, 2012 and runs through December 31, 2012. You must submit your application—either electronic or hardcopy—to the LITC Program Office in Washington, DC by July 15, 2012. The grants are awarded to organizations that provide education and outreach to non-native English speakers and service to low-income taxpayers with IRS grievances; applicants may apply for either program type or both. The IRS lists examples of qualifying organizations as follows:
- Clinical programs at accredited law, business or accounting schools whose students represent low income taxpayers in tax disputes with the IRS; and
- Organizations exempt from tax under Internal Revenue Code Section 501(a) that represent low income taxpayers in tax disputes with the IRS or refer those taxpayers to qualified representatives.
Organizations interested in applying will have a greater success rate if they 1) are receiving a grant for the 2011 cycle or 2) plan to fill one of the following 2012 needs:
- New clinic applications in Montana, Nebraska, Nevada and Wyoming
- ESL clinic applications in Connecticut, Kentucky, Montana, New Mexico and South Dakota
- New clinic applications in the metropolitan areas of Los Angeles and Sacramento, CA, specifically in the Los Angeles, Kern, Riverside, Ventura, El Dorado, Placer, Sacramento, San Joaquin, and Stanislaus counties.
- New clinic applications in the metropolitan areas of Philadelphia, PA, specifically in the Berks, Delaware, and Philadelphia counties.
- New clinic applications in the metropolitan areas of St. Louis, MI, specifically in the Cape Girardeau, Jefferson, St. Francois, and St. Louis counties.
The IRS notes, “We encourage existing clinics to consider expanding their services to cover these areas, where possible. Notwithstanding the criteria detailed above, all applications for clinics from all areas are welcomed and will receive full consideration.”
To learn more, visit the IRS website at http://www.irs.gov/pub/irs-pdf/p3319.pdf.
Universal Accounting’s Tax Training
If you would like to become eligible to prepare taxes under the new regulations established by the IRS, consider training with Universal Accounting. Not only could you earn the Professional Tax Preparer Designation, but you could also learn everything you need to know to pass the IRS Competency Exam and receive up to 60 CPE credits, depending on the number of modules you complete.
Be prepared for the changes that are impacting all paid tax preparers. Call UAC at 1-877-833-7909 to enroll in the Professional Tax Preparer Program today and improve your competitive advantage while securing your professional standing in the tax industry.
We welcome your feedback and comments. Please post!
If your actions inspire others to dream more, learn more, do more and become more, you are a leader.—John Quincy Adams
On May 18th, 2011, IRS Commissioner Doug Shulman spoke for the Leaders & Legends Series at Johns Hopkins Carey Business School in Baltimore where he advised listeners to measure success by “looking down the road farther, seeing around the corners sooner, taking on big challenges, creating a positive vision and [making] a difference in people’s lives.”
The series, as described by the Johns Hopkins website, features “today’s most influential business minds addressing topics of global issues and importance.” Shulman’s message was entitled “Leading around Corners: Meeting Today’s Challenges while Positioning for Tomorrow.”
While Shulman is best known as IRS Commissioner, he has also worked as a private equity investor as well as a securities industry service provider and regulator. And while the IRS’ primary function is to collect the revenue to run the government, Shulman sees his key role as setting the organization’s strategic direction and ensuring they get there.
In order to successfully lead any organization to success, Shulman believes in the necessity of three key ‘ingredients.’ First, you must have organizational support. Second, you must clearly communicate your vision and how it will be accomplished. And third, “you need a relentless and myopic focus on your priorities.”
Shulman believe his work with the IRS thus far demonstrates the necessary balance of all these ingredients. He cites advances in combating offshore tax evasion, ensuring the competency of paid tax preparers and more and better use of data as just a few examples of this organization’s exemplary work.
The Commissioner emphasized the importance of innovation as the IRS moves forward, noting their attempts to provide taxpayers with advance technology like IRS2Go, their first smartphone application allowing taxpayers to track refund status with their Android or iPhone.
In conclusion, Shullman said, “I called this speech, ‘leading around the corners’ because so much of my job is not just meeting today’s challenges but positioning the agency for the next 10 to 20 years and being ready for what lies around the corner and leading this great organization and its dedicated public servants into the future.” He encouraged those listening to “take on the mantle of leadership; whether it’s in business, education and I hope, government service. Your own future brims with opportunity and promise, and I wish you all the best.”
Universal Accounting Helps Tax Preparers Succeed
Like Shulman, we at Universal believe it’s important to prepare for the future, and we’re interested in seeing your future succeed as a tax preparer. Our Professional Tax Preparer Program is designed to help professionals like you master tax preparation, becoming efficient in the completion of individual and business returns. If you would like to learn more, visit Universal for a free video today!
We welcome your feedback on this article! Please post your comments below.
Resources
–. “Prepared Remarks of IRS Commissioner Doug Shulman to the Leaders & Legends Series, Johns Hopkins Carey Business School, Baltimore.” 18 May 2011 IRS.gov
–. “Leaders + Legends.” Johns Hopkins Carey Business School
Small Business Week may have ended on May 20th, but in celebration, the IRS gave a gift that keeps on giving: free resources and information. Faris Fink, IRS Commissioner for the Small Business and Self-Employed Division explained, “When you’re running a business, you don’t need to be a tax expert, too. But you do need some basics to stay tax compliant so your business can thrive. There are many tax credits and deductions currently available. So now is a good time to learn about the tools and services the IRS offers.”
The IRS reminded small business owners and their tax preparers of the Small Business Tax Center. The center provides links to useful IRS tools like their Video Portal which archives copies of all webinars intended for small business and tax professionals (the one that ran last week entitled “Small Business Advantage” will be posted two weeks after it originally aired). There you can also find a downloadable tax calendar, common forms, instructions on securing an Employer Identification Number (EIN), information on starting, operating, or closing a business, and more.
The IRS also used the opportunity to remind business owners about important tax credits they can claim, including the small business healthcare credit which encourages small businesses and tax-exempt organizations to offer their employees affordable health care. Tax relief can also be found in Depreciation and Amortization: Form 4562, through which small businesses can deduct most of their costly purchases in new property and equipment. Small business owners can take advantage of these benefits when filing their 2011 returns.
Universal Accounting is Also a Valuable Resource
Now that tax season has ended, you might have some extra time to invest in yourself and your tax practice. UA’s Professional Tax Preparer (PTP) program will enable you to hone your skills and comply with the new IRS tax preparer regulations. Not only could you earn a professional designation, but you could also learn everything you need to know to pass the IRS Competency Exam and receive up to 60 CPE credits, depending on the number of modules you complete. The four models include the following:
1. Establishing the Tax Foundation. Learn the entire process for determining income and adjustments to income, which will factor into the Adjusted Gross Income. In fact, you’ll cover all the information necessary to prepare Page One of Form 1040.
2. Becoming the 1040 Expert. This module deals with background information and forms that go into the 1040, Page 2. We also discuss all the adjustments that can be made to gross income, including credits that are allowed and different types of deductions and exemptions that can be taken against that adjust gross income number.
3. Profitable Business Returns. Here we introduce you to the world of business organizations and their tax concerns. This module is a practical companion to Module 2, as it give you experience in completing each of the schedules and forms common to business organizations.
4. Building Your Successful Tax Practice. Get a head start in creating and running your own tax preparation service. You will find yourself light years ahead of the competition as you put these strategies into play.
UAC’s PTP program will not only give you hands-on training in completing full individual (1040) and business returns (1065, 1120, 1120S), but it will also provide you with step-by-step instruction in becoming a sole practitioner,one year of follow-up support from expert tax preparers and our iron-clad, risk-free guarantee.
Hone your skills, earn a designation, and comply with IRS regulations. Three birds, one stone. Call Universal Accounting at 1-877-833-7909 begin_of_the_skype_highlighting 1-877-833-7909 end_of_the_skype_highlighting to enroll today.
We welcome your feedback and comments. Please post!
Resources
–. “IRS Marks Small Business Week by Showcasing Tools, Resources; Spotlights Tax Benefits Available in 2011.” IRS.gov
IRS Small Business Tax Center– http://www.irs.gov/businesses/small/index.html
IRS Video Portal—http://www.irsvideos.gov/SmallBusinessTaxpayer
Work with the IRS
If you’re a tax preparer, you might consider working with the IRS to enhance your credentials while participating in valuable community service. On May 2nd the IRS requested the submission of applications for the Internal Revenue Service Advisory (IRSAC), an organization that enables IRS officials and representatives to discuss significant tax issues as they relate to the federal tax administration.
Comprised of up to 35 individuals, members of the Internal Revenue Service Advisory fulfill a three-year appointment. Each fall the IRSAC submits an annual report to the commissioner at a public meeting.
IRS Commissioner Doug Shulman says, “The feedback and recommendations from IRSAC members have and will continue to assist the IRS with a wide range of strategic initiatives.”
Applications are being accepted for approximately 12 positions that begin in January of 2012; to be considered, submit your application before June 17th.
Individuals and organizations can nominate qualified professionals for the IRSAC which is comprised of people with diverse backgrounds and professional expertise. Professionals with tax experience are encouraged to apply, including tax attorneys, certified public accountants, enrolled agents, appraisers, and the business community.
In addition to IRSAC applicants, the Treasury Department and the IRS are also seeking public comment “on issues relating to the shared responsibility provisions included in the Affordable Care Act that will apply to certain employers starting in 2014.”
The Affordable Care Act requires employers to report the cost of insurance coverage they provide their employees; the information is to be noted on each employee’s annual W-2 Form and will apply to various employers beginning in 2014. This act may also require employers with 50 or more full-time employees that do not offer affordable health coverage to submit a shared responsibility payment.
The IRS is currently requesting feedback on several issues related to this act, specifically regarding how employers can comply with the shared responsibility provisions and determine which employees qualify as full-time.
Visit the IRS website for more information on submitting comments and applications.
Universal’s Tax Training Will Prepare You for the 2011 Tax Year
Tax professionals charge 100 + an hour providing planning and preparation services to clients. In the course of one tax season, many tax preparers earn what others take an entire year to bring in. Universal’s Professional Tax Preparer (PTP) Program will enable you to help your clients save enough money in taxes to more than cover your fees. And what you earn in one tax season will more than cover the registration fee for this course.
Become a Professional Tax Preparer (PTP) before next tax season. Universal’s PTP program will not only give you hands-on training in completing full individual (1040) and business returns, but it will also enable you to be in compliance with new IRS regulations. Celebrate the end of tax season by investing in training that will enable you to increase your knowledge and skills. Call 1-877-833-7909 begin_of_the_skype_highlighting 1-877-833-7909 end_of_the_skype_highlighting and enroll in the Professional Tax Preparer program now!
Resources
–. “IRS Seeks Applications for the Internal Revenue Service Advisory.” 2 May 2011 IRS.gov
–. “Treasury, IRS Seek Public Input on Certain Employer Provisions of the Affordable Care Act.” 3 May 2011 IRS.gov
On April 27th, the IRS announced that it has selected Prometric, Inc. to administer the fingerprinting program and competency exam that’s required for some tax preparers as part of the new IRS regulations. Daon Trusted Identity Services will perform the fingerprinting as part of the process, consulting with the IRS on suitability factors of PTIN applicants.
Prometric, Inc. will first conduct a job analysis by interviewing subject matter experts to determine the knowledge and skills needed for competent tax return preparers. The IRS gives final approval of all test items. Following approval, the IRS will release test specifications to help individuals prepare for the exam.
In addition, the IRS is taking aggressive action against tax preparers with criminal tax convictions or permanent injunctions in order to prevent them from preparing returns. A recent article posted to the IRS website explained, “This is just one of several recent moves to improve the quality and oversight of the tax preparation industry.”
Doug Shulman, IRS Commissioner, said, “We owe it to all taxpayers and the many honest tax return preparers to remove the relatively small number of bad actors from the tax preparation industry. Just one unscrupulous tax return preparer can cause a lot of financial damage to both taxpayers and the tax system.”
Currently more than 700,000 tax preparers have registered and received their Preparer Identification Numbers (PTINs) in compliance with new IRS regulations. The 9-digit PTIN must be renewed annually and noted on all returns and refund claims.
In reviewing the PTINs, 19 preparers were found with criminal tax convictions or permanent injunctions, all of which have been sent letters threatening to revoke their PTINs; they have 20 days to file a response and argue the revocation.
Also noted in their review, the IRS found returns without PTINs, with identifying numbers other than PTINs and/or without signatures. Notices have been sent to these preparers as well.
Shulman continues, “Hundreds of thousands of tax return preparers, the vast majority, play by the rules every filing season. The IRS is committed to ensuring they have a level playing field. Compliance with regulations that require the signing of a tax return by a paid preparer and use of the PTIN is central to our enforcement effort.”
Registration continues with approximately 2,000 preparers completing the process each week. If you receive compensation as a tax preparer, you must comply with IRS regulations and register for a PTIN and pay the annual $64.25 fee. This fall, some tax preparers will also be required to a pass competency test and earn 15 hours of continuing education credit each year. CPAs (Certified Public Accountants), attorneys and EAs (enrolled agents) are exempt from these final two requirements.
Universal Accounting’s Tax Training
If you would like to become eligible to prepare taxes under the new regulations established by the IRS, consider training with Universal Accounting. Not only could you earn the Professional Tax Preparer Designation, but you could also learn everything you need to know to pass the IRS Competency Exam and receive up to 60 CPE credits, depending on the number of modules you complete.
Be prepared for the changes that will impact all future tax preparers. Call UAC at 1-877-833-7909 to enroll in the Professional Tax Preparer Program today, and improve your competitive advantage while securing your professional standing in the tax industry.
