Friday, March 26, 2010

IRS Updates Congress on Preparer ID Regulations

IRS Commissioner Doug Shulman recently testified before Congress regarding the requirement of paid tax preparers to have a federal ID number, pay annual fees and, for some, be tested on their tax competency. Shulman indicated that proposed regs will require that tax preparers obtain and use a taxpayer identification number on any returns signed after this December 31. Preparers will also be required to renew the numbers periodically, use the number on all tax returns prepared and pay yet to be determined user fees. Many preparers will also have to take a competency exam to be eligible, although enrolled agents, certified public accountants and tax attorneys will be at least temporarily exempted from this testing. It is possible that the IRS will develop an audit process to review the competency of preparers which use the TPID (tax preparer identification) number. Shulman also addressed the use of figurehead tax return signers.

The whole registration of tax preparers issue was addressed in depth last January and this basically is an update. It is somewhat unsettling that the comment period on the proposed regs appears likely to end before the periodic identification fees are known.


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