Monday, August 30, 2010

Drilling Down on the Registered Tax Preparer Regs

The Internal Revenue Service is expecting about 1.2 million tax preparers to request a taxpayer identification number, which is set to be required for paid preparation of any tax return with a due date of December 31, 2010 or later. To get the number, the applicant must be a enrolled agent, CPA, attorney or registered tax preparer. While the present annual charge to receive the number is about $65, the IRS plans to soon have regulations regarding added fees for: regulating enrolled agents and registered tax preparers, an examination for registered tax preparers and providing and monitoring continuing education. The new regs also provide some relief for tax preparers who are double charged and a mechanism to determining fitness of the tax preparer to practice before issuing the identification number.

Non-EA/CPAs will be dismayed by the likelihood of a new round of monetary charges and libertarians won't be thrilled by the bureaucracy and "red tape" associated with the identification program. One hopes that there IS an improvement in tax preparation quality resulting from this program; elsewise, it is hard to see how the benefits from the program justifies the cost.


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