November 28, 2010
IRS Regulates Tax Preparer Business
The IRS has begun steps to better regulate the tax return preparation
industry. Presently, not all tax preparers are registered with the
government. Many of those who prepare tax returns for a fee do so on a part
time basis and are completely unknown to the government. They identify
themselves using their Social Security numbers.
From January 1 next year, all tax preparers, whether they be companies or
individuals, will have to register with the government. They will be given a
Preparer Tax Identification Number (PTIN). Those who already have PTINs must
renew their registrations before January 1, 2011. The PTIN will be recorded
in every tax return form that is submitted to the IRS. Those who identify
themselves using their Social Security numbers will no longer be allowed to
do so. Instead they have to use their PTINs. Those who fail to do so will
be fined.
The IRS says that 60% of taxpayers pay someone else to prepare their tax
return for them whereas 30% of taxpayers use tax software to complete their
annual returns.
The IRS also plans to have the tax preparers sit for periodic examinations to
maintain a high standard of their work as part of their continuous education
program. This program also aims to enable tax preparers to be kept abreast
with the frequent changes in tax laws.
The IRS intends to keep regulating the tax preparation industry in the coming
years to ensure that taxpayers are comfortable with the people who prepare
their tax returns for them. The fact is that while there are many proficient
and professional tax preparers and tax preparation firms, there are also many
unscrupulous ones ever ready to make a fast buck, make erroneous returns and
then just disappear. Ultimately, the taxpayer must take responsibility for
any errors in his return.
The IRS recommends that the taxpaying public who uses the services of paid
tax preparers makes sure that the tax preparer’s PTIN is recorded in the tax
return forms. By doing so it makes it easier to trace the tax preparers and
hold them responsible for their work.
The response from the tax preparers themselves to these regulations by the
IRS has been generally positive and they are supportive of them.
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Comments on IRS Regulates Tax Preparer Business
I submitted my PTIN application on October 25, 2010 accompanied with a check for $64.25. I have not received anything todate. Help, please!
Try going to the taxpayer advocate. This is your government at work.