IRS Activates New PTIN System

The IRS deployed a new preparer taxation marker series (PTIN) registration complement Sep 28 as a member of a beginning to register and umpire paid taxation lapse preparers.

All paid taxation lapse preparers (including CPAs, attorneys and enrolled agents) contingency request for and obtain a PTIN—even if they already have one—before scheming any sovereign taxation earnings in 2011.

The regime facilities a new online PTIN focus process during a Tax Professionals page of irs.gov. As an alternative, preparers might contention a paper focus by regulating Form W-12, IRS Paid Preparer Tax Identification Number Application.  The IRS estimates it will take 4 to 6 weeks to respond behind to preparers per paper applications.

The IRS determined a executive horizon for a new PTIN complement in dual sets of final regulations (T.D. 9503 and T.D. 9501) amending executive regulations and those underneath Sec. 6109 ruling furnishing of preparer ID numbers on earnings and claims for refunds. On a “Tax Professionals” Web pages, a IRS posted questions and answers about PTINs and other aspects of a initiative. And in a news recover (IR-2010-99), a IRS summarized a changes and how they will impact all lapse preparers, including CPAs.

On Sep 30, 2010, a Treasury Department and a IRS will tell in a Federal Register final regulations underneath Sec. 6109 (T.D. 9501) that need taxation lapse preparers who ready all or almost all of a taxation lapse or explain for reinstate to use a PTIN as their identifying number. The regulations will also yield that to be authorised to accept a PTIN, a taxation lapse preparer contingency be an attorney, CPA, enrolled agent, or a new difficulty of “registered taxation lapse preparer.” T.D. 9503, that also will be published in a Federal Register on Sep 30, adds Regs. Sec. 300.9, that establishes a $50 user price to request for or replenish a PTIN.

Testing and Continuing Education

In Tuesday’s news release, a IRS pronounced that as it finalizes superintendence for that it expelled due regulations in Aug (REG-138637-07), on focus of a use manners of Circular 230 to new classes of lapse preparers, it will cruise incompatible from new contrast and stability credentials requirements, in further to CPAs, attorneys and enrolled agents, “a dissimilar difficulty of people who rivet in lapse credentials underneath a organisation of someone else—for example, some employees who ready all or almost all of a lapse and work in certain veteran firms underneath a organisation of one of a above people who signs a return.”

On a website, a IRS pronounced it expects to muster a contrast requirement in mid-2011 and has not nonetheless set a start date for a stability credentials requirement.

Foreign Preparers

With a new Form W-12, a IRS also expelled dual forms for preparers lacking a Social Security number: Form 8945, PTIN Supplemental Application For U.S. Citizens Without a Social Security Number Due To Conscientious Religious Objection; and Form 8946, PTIN Supplemental Application For Foreign Persons Without a Social Security Number. In a preliminary to T.D. 9501, a IRS pronounced it will emanate transitory superintendence by a finish of this year describing how unfamiliar and other lapse preparers though Social Security series might obtain PTINs.

Application and Fees

After Dec 31, to be authorised to ready taxation earnings for compensation, all paid lapse preparers will be compulsory to have a PTIN and allow it on all earnings they prepare. All paid lapse preparers—including nonsigning preparers who ready all or almost all of a taxation return—must request and reapply annually, any time profitable a fee. Preparers, including CPAs, attorneys and enrolled agents, contingency request either or not they already have a PTIN. Those who already have a PTIN “generally” will be expelled a same number, though if they accept a new one, they contingency use it going forward.

Applicants contingency state that they are stream on both their particular and business taxes or explain because they are not. They contingency also state either they have been convicted of a transgression in a past 10 years and, if they have been, yield an explanation.

CPAs, attorneys, enrolled agents and state-regulated lapse preparers contingency yield information about their licenses.

Applicants contingency compensate a $64.25 fee, that consists of a $50 IRS user price compulsory by new Regs. Sec. 300.9 and a $14.25 price charged by a site’s third-party administrator. The price might be paid by credit label online. Applicants profitable by check with a paper Form W-12 are told to design their PTIN within 4 to 6 weeks.

AICPA Position

The PTIN registration routine is partial of a recommendations contained in IRS Commissioner Doug Shulman’s preparer hearing news expelled in Jan 2010. In further to requiring lapse preparers to obtain a PTIN, a altogether beginning would also need those preparers who are not CPAs, attorneys or enrolled agents to pass an hearing and approve with stability credentials requirements.

In a criticism minute on a due regulations that need a use of a PTIN by all paid preparers (REG-134235-08), a AICPA said:

The AICPA believes a distribution of one singular identifying series to any taxation lapse preparer, joined with creation all preparers theme to a veteran ethics standards of Circular 230 and a Code’s polite preparer chastisement regime, will infer to be an effective process for addressing [IRS] concerns about taxpayers receiving efficient and reliable use from competent taxation professionals.

The minute voiced a AICPA’s “serious concerns with aspects of a due regulations; and many particularly a nonsigning preparer construct.”

The AICPA’s comments focused on (1) a prolongation of a PTIN requirement to nonsigning employees of CPA firms; (2) a suitable pretension for persons receiving a PTIN; (3) a IRS’ deception of “reasonable user fees”; and (4) unfamiliar preparers though Social Security numbers.

In further to addressing a PTIN due regulations, a AICPA’s comments also titillate a IRS to check doing of an hearing for lapse preparers because:

[A] successful doing of registration and use of PTINs, along with a deception of Circular 230 on all preparers should be sufficient to residence reprobate and/or amateurish taxation lapse credentials and yield extensive gains to taxation administration in general; (2) it might means difficulty among taxpayers about a relations education of taxation lapse preparers; and (3) a additional burdens to a taxation preparers and pass by of these costs to a taxpaying open should be considered.

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

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