New Tax Preparer Rules Imposed

The IRS released a statement last week outlining the steps used to identify tax preparers with criminal tax convictions or permanent injunctions.

According to the statement, more than 700,000 tax preparers have registered for a PTIN and the IRS is continuing to register up to 2,000 additional preparers each week. Oversight of these preparers is managed through a database that is administered by the IRS’s Office of Professional Responsibility (OPR). The OPR has identified 19 tax preparers who failed to disclose a criminal tax conviction or permanent injunction in their PTIN applications.

These preparers have been contacted by the IRS with a proposal to revoke their PTINs. According to the IRS, preparers who face revocation have 20 days to file a response and provide written support to defend their PTINs.

The identification of these 19 preparers is just one of several attempts to expand and improve the oversight of the tax preparation industry. The IRS plans to review tax returns prepared with an identifying number other than a PTIN, and returns that were prepared with no identifying number. The IRS is also developing a process to discover returns that appear professionally prepared, but lack a preparer signature. According to IRS Commissioner Shulman, “Compliance with regulations that require the signing of a tax return by a paid preparer and use of the PTIN is central to our enforcement effort.”

For more information about the new preparer rules and PTIN registration, or to view the IRS announcement, “IRS Begins Enforcement of New Preparer Rules,” visit www.IRS.gov.

By Barbara Cook