subject: Facts About The New Tax Preparation Certification [print this page] Over eighty percent of households in the United States are now using a paid professional or some sort of software to assist with tax preparation each and every year. The IRS now wants to gain a better understanding of exactly who these people are and just how qualified are they to help John Q. Taxpayer file his return by the letter of the tax law.
As it stands now, anybody, with or without a tax preparation certification, can charge a fee for preparing someone else's tax return; There is no mandate in place for paid tax preparers to meet even the minimum standards, although some of theme are licensed by their states or certified by the IRS. Basically, this means anyone claiming to have the smallest understanding of tax law and filing return practices can demand payment for filing my taxes.
The IRS, after a six month study, has begun an effort to reach the tax preparers with higher levels of education and enforcement. Higher standards is the hope. This will eventually provide greater protection for taxpayers who use some form of support during tax season.
Let's take a look at some of the changes that are being proposed by the IRS. The first requirement is in the form of the PTIN or Preparer Tax Identification Number. The measure requires ALL paid tax preparers to register with the IRS and get a valid PTIN, which essentially serves as tax preparation certification from the IRS. The process will include a compliance check to ensure that all individuals charging fees to file others people's taxes have, in fact, paid up on their own taxes, a veritable no-brainer from my perspective.
The Internal Revenue Service will start requiring all paid tax preparers to complete a competency test. This will not be enforced on attorneys, CPA's, and other professionals as long as they are in good standing. However, this initial test will not be the end. This certification will also require a pursuit of higher levels of ongoing professional education. This measure also excludes practicing professionals (attorneys, CPAs, etc.) who already adhere to industry continuing education requirements.
Lastly, the IRS is set to extend the ethical rules outlined by the Treasury Department to include ALL paid tax preparers. In previous tax seasons, these rules only applied to attorneys, CPSs, and other IRS-recognized agents; but with this extension, the IRS will be able to discipline preparers for unethical conduct.'
Despite these efforts by the IRS to standardize paid tax preparation, it is still your task to seek out a reputable tax preparer. As the taxpayer, you are still legally responsible for the information stated on your return, regardless of who put it there.
