Back in September 2010, the IRS issued final regulations under section 6109 requiring those who prepare tax returns to have a "preparer tax identification number" (PTIN). Only attorneys, CPAs, enrolled agents and registered tax return preparers were initially eligible for a PTIN, but Notice 2011-6 created two exceptions under Reg. 1.6109-2(h) permitting two additional groups to obtain PTINs and prepare tax returns, if all applicable compliance and suitability checks were satisfactorily completed. These included certain individuals that are supervised by PTIN attorneys, CPAs, and enrolled agents/actuaries who sign the return prepared by the supervisee as well as a transition rule covering those who certify that they do not prepare types of returns covered by the PTIN rules (the initial PTIN requirement applies only to individual tax returns).
In July 2011, the Treasury and IRS also amended the rules governing practice before the IRS in 31 CFR Part 10(commonly referred to as "Circular 230") to add provisions related to the new registered tax return preparer requirement. Those rules broaden the definition of "practice before the IRS" to include preparing a return for compensation, and broaden the types of practitioners covered by the rules to include registered tax return preparers, requiring them to pass a competency exam and comply with any other established requirements.
The IRS released additional guidance for the new return preparer rules on Tuesday, Sept. 27, 2011: (i) IR-2011-96, in which it provided additional information about the renewal process for PTINs (preparer tax identification numbers), testing procedures, and CLE requirements; (ii) Notice 2011-80, providing guidance about renewal of PTINs; and (iii) a notice of proposed rulemaking, REG-116284-11, in which it set out new user fee requirements for the competency test and fingerprinting (where applicable): the amounts in the proposed regs are $27 and $33, respectively, plus any third-party vendor charges.
Provisional PTINs are currently being issued to enable people to prepare tax returns during the transition to the full program in which competency testing will take place. That provisional PTIN process will continue through at least April 18, 2012. Generally, those who currently have provisional PTINs will have to pass a "suitability check" for issuance of a permanent PTIN, which will include fingerprinting to enable a search of the FBI database for those who reside or are employed in the US. (The IRS is still considering possible additional requirements as part of the suitability check.)
Notice 2011-80 indicates that PTINs must be renewed each calendar year during the last quarter (between October 15 and December 31) using the online application or paper FORM W-12. The renewal fee for 2012 is $64.25. The competency examination requirement will apply for renewing PTINs for 2013 and later years.
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