Tax Return Preparer Registration Fee Is Kind of Set

Tax Return Preparer Registration Fee is Kind of Set

IRS has finally announced the cost we each will have to pay to be “registered” – kind of. Earlier IRS was thinking about a three-year registration and fee, but has now changed its mind and made the registration and fee an annual issue. The fee is set at $50 per year. The registration period is scheduled to start about September 1, 2010. BUT READ ON.

There is another fee which will be charged by the third-party vendor who is chosen to operate the online system. Their fee is expected to be less than $50 and announced soon.

Other info – Almost a year ago IRS announced it had the authority to register tax return preparers. One of the first parts of this registration is that each tax preparer must have a PTIN and use it to sign tax returns instead of using a Social Security Number. The PTIN is obtained by filing a Form W-7.

Anyone who already has a PTIN has to reregister. The prior PTIN is still valid and a new PTIN is NOT assigned. IRS has records of previous PTINs assigned, but still requires a reregistration of these preparers. This way IRS will know the PTIN holder is still actively a tax return preparer and can also collect the annual $50 fee. This fee is intended to cover the compliance and suitability checks to be conducted on registered tax return preparers as well as compliance related matters.

A “tax return preparer” currently includes anyone who prepares a tax return. This includes income tax returns, information returns, payroll returns, etc.

David Williams, IRS Director of Electronic Tax Administration & Refundable Credits, spoke at NATP’s Annual Conference in Austin, TX in late-July 2010. During his discussion he indicated:

1 - - Although IRS “requires” the use of PTINs for this upcoming tax season, it does not plan to reject any returns that use the preparer’s SSN. IRS plans to send letters to preparers who use their SSN instead of the PTIN, advising these preparers of the requirement.

2 - - The first exam is expected to be available next June. The cost of the exam is not yet known. EAs, CPAs, and attorneys will not be required to take this exam. However IRS could later require the exam to be taken later by an EA, CPA, or attorney on a case-by-case basis.

3 - - Tax return preparers who register their PTIN (or first obtain a PTIN) PRIOR to the exam date can take the exam at anytime within three years of the registration date. If the exam is not taken and passed within this three-year time period, the tax return preparer will be removed from the list of registered preparers.

4 - - Tax return preparers who did not register a PTIN prior to the exam availability date will be required to take and pass the exam prior to being assigned a PTIN (or being able to reregister an existing PTIN).

In the future it is expected that continuing education providers will be charged a fee for their registration. Of course these education providers will be passing the additional expense on to the students of their programs.

Comments on the new regulation need to be submitted to IRS no later than August 23, 2010. The regulation provides the details of how and where to submit comments.

IRS will be releasing more information in the future addressing the tax return preparer registration.

Need help with a Federal tax issue? Ashwaubenon Tax Professionals (David & Mary) offer a fee based consulting services.

This text has been shared with you courtesy of: David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (fax 920-496-9111) , , , and .

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