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Posted 1/19/2012
IRS Return Preparer Office Gives Outlook For 2012
In an upbeat statement on the IRS's Return Preparer Office Facebook page, Director David Williams gave an overview of the Office's 2011 accomplishments and a preview of initiatives in 2012. Williams gave a further update on competency testing and the disclosure of PTIN holder information at a National Public Liaison meeting this morning.
The IRS registered nearly 800,000 tax return preparers in 2011, and Williams noted that when the IRS started the process, it was not even sure how many tax preparers were in the U.S. He also explained that the IRS is continuing to review alternatives to its 2011 proposals to require some preparers to submit fingerprints for a criminal background check. While the idea is currently on hold, Williams indicated that some preparers eventually will have to be fingerprinted, but the IRS is trying to come up with less burdensome options.
Competency Testing, Tax Law Updates
Williams reported that over 2500 individuals have now taken the new exam allowing Prometric, the testing vendor, the ability to complete its exam process and begin issuing results upon completion of the exam. The IRS soon will be able to provide statistics on how many CPAs, EAs, and others have taken the test. Williams solicited feedback from practitioners on their exam experience. Williams clarified the exam will be "evergreen", meaning, as the tax law changes, the exam will not necessarily require major overhaul as the questions are more generic and will only test basic concepts. However, if a major piece of tax legislation is enacted, it will be incorporated into the exam. Previously, the IRS plan was to update the exam annually on or about April 1 for tax law changes.
Continuing Education May Be Adjusted in 2012
The new continuing education requirement begins in calendar year 2012 and applies to all preparers who are required to take the Registered Tax Preparer Test. The IRS got started late on launching the application process for continuing education providers. As a result, William's office is closely monitoring the number of approved providers to ensure there are enough providers for everyone who needs to take courses. If necessary, Williams said the IRS will "make a one-time adjustment to the annual 15-hour requirement" in 2012. However, participants at the meeting urged the IRS to keep the 15-hour requirement, so a delay is unlikely.
Public Release of PTIN Holders Information
Practitioners have been concerned with the release of the information on their PTIN application to the public. In response to these concerns, Williams advised that the federal Freedom of Information Act (FOIA) requires that the IRS release preparers' addresses. The IRS will give PTIN holders the option to list a separate mailing address (like a P.O. Box) so their personal addresses will not be disclosed. The IRS is continuing to work on "tightening up this process" to benefit practitioners within the context of the FOIA rules and regulations, according to Williams.
'Ghost Preparers', Complaint Forms
Identifying and rooting out the so-called "ghost preparers" who try to game the system by not registering is a priority for the Return Preparer Office, Williams said. "We are increasing our compliance efforts and we have a strategic plan. We are using technology to identify patterns in tax returns that would indicate the return was prepared by a third party." The IRS has consolidated the complaint procedure for all return preparer issues and has developed a form for the public and other tax preparers to notify the IRS if someone is breaking the rules. The form asks which of the following problems the reporting party has encountered with the preparer:
- False Exemptions or Dependents
- False Expenses or Deductions or Credits
- False or Overstated W-2 or Form 1099
- False or Altered Documents
- Incorrect Filing Status
- Theft of Refund
- PTIN Missing
- PTIN Misuse
- Misrepresentation of Credentials
- Paid Preparer Failed to Sign
- Paid Preparer Failed to Provide Copy of Return
- Paid Preparer Failed to Return My Records
- Paid Preparer Diverted Refund to Unknown Account
- Omitted Income
- E-filing Using Payroll Stub
- E-filing Cash Advance
- Failure to Send Employment Taxes or Withholding to IRS
- Paid Preparer Filed Returns Using Off Shelf Software or Free File
- Paid Preparer Provided a Copy that is Different from What was Filed
- Other (explain)
Click here for a copy of Form 14157, Complaint: Tax Return Preparer.
To access David Williams' Facebook statement, go to http://www.facebook.com/#!/notes/irs-return-preparer-office/happy-new-year-everyone/220090338077285.