The Internal Revenue Service recently launched an unprecedented effort to provide some oversight over the tax preparation industry, including Alaska's 1,600 tax preparers.
Most tax preparers are dedicated to quality tax return preparation and are committed to quality service for their clients. But the actions of a few preparers can cause lots of problems - for their clients, for preparers who follow the rules and for the IRS.
Here's what we're doing:
All paid tax return preparers must register with the IRS and obtain a new or renewed Preparer Tax Identification Number (PTIN) prior to preparing a return in 2011. There is a $64.25 fee.
Starting in mid-2011, the IRS plans to require that certain paid tax preparers pass a competency test. CPAs, attorneys and enrolled agents will be exempt from this exam because their professional requirements also include testing.
The IRS also plans to require certain paid tax preparers to take 15 hours of continuing education courses annually beginning sometime in the future. The same exceptions apply.
And lastly, the IRS will create a new designation for those paid tax preparers who obtain a PTIN, pass the test and take their education courses: Registered Tax Return Preparer. This future credential will signal to taxpayers a certain level of competency and qualification.
Sixty percent of taxpayers use a tax preparer. They deserve some peace of mind that the person they are paying to do their taxes has some degree of proficiency and high ethical standards.
David A. Tucker II
Tucker is a spokesman for the IRS' Seattle office.