A recent Kiplinger report (August 20, 2010) offered the following updates on the Preparer Registration Rules.
“More details are dribbling out on IRS’ upcoming regulation of tax preparers. Starting with 2010 returns, all paid preparers will have to register with the IRS and pay a fee of $64.25 to get a preparer ID number to enter on returns. In addition, un-enrolled return prepares. . . those other than lawyers, CPAs and enrolled agents. . . will have to pass competency tests and satisfy continuing education requirements.
“Testing will begin in mid-2011. Those who register and get an ID number before the testing regime is up and running will have until the end of 2013 to pass. In the interim, they can still validly prepare tax returns for 2010, 2011 and 2012. They can take the test multiple times, but they will have to pay a fee each time. A third party will give the tests at various locations. They won’t be available online. Commercial firms are expected to offer test preparation courses. IRS won’t do so.” The Kiplinger Tax Letter, Vol 85. No. 17 (August 20, 2010)
A point of clarification to all:
The information cited from the Kiplinger Report states that if you register in 2011, as long as you do so “before the testing regime is up and running,” you have until 2013 to pass. This is correct, according to new information on the IRS website, but it is a change from what had previously been announced.
Our earlier understanding, based on IRS information, was that the deadline for pre-registering is December 31, 2010, and that anyone who applies after that will not receive a PTIN without first passing the test. Since the test wasn’t going to be available until mid-2011, this had the effect of blocking anyone from preparing a paid return in 2011 who didn’t register in 2010. That is what we have informed our students in a mass email we sent out, and what our website still says, if I am not mistaken.
So this new announcement represents a change from that older position, and probably reflects an acknowledgment that the IRS and their contractor/vendor in charge of the registration are not going to have the system ready to go on time (they had earlier said registration will begin September 1; now they are saying mid-September).
F. William (Bill) Brough, MBA, PB
Tax Curriculum Specialist