Part III – Administrative, Procedural, and Miscellaneous Restrictions on Use of the Term Registered Tax Return Preparer Notice 2011-45 The Department of the Treasury and the IRS are implementing the recommendations contained in Publication 4832, “Return Preparer Review.” As part of this implementation, the Department of the Treasury and the IRS have issued final regulations
IRS Issues Proposed Regulations That Would Require Tax Preparers to File Due Diligence Checklist with All EITC Claims Submitted in 2012 IR-2011-98, Oct. 6, 2011 WASHINGTON —The Internal Revenue Service announced today that it is issuing proposed regulations that would require paid tax return preparers, beginning in 2012, to file a due diligence checklist, Form
Recent IRS News View recent, tax-related IRS news releases below. Resources for Tax Preparers: IRS Releases Specifications for Registered Tax Return Preparer Test IR-2011-89, Sept. 6, 2011 WASHINGTON — The Internal Revenue Service today released the specifications for the competency test individuals must pass to become a Registered Tax Return Preparer. The test is part of an ongoing
Tax preparation software for tax preparers and PTIN hassle. WASHINGTON, D.C. (NOVEMBER 23, 2011) The Internal Revenue Service said it plans to add a new option to its Preparer Tax Identification Number system in December for users who need to change the email address associated with their online PTIN accounts. The new option
In 2012, Many Tax Benefits Increase Due to Inflation Adjustments IR-2011-104, Oct. 20, 2011 WASHINGTON — For tax year 2012, personal exemptions and standard deductions will rise and tax brackets will widen due to inflation, the Internal Revenue Service announced today. By law, the dollar amounts for a variety of tax provisions, affecting virtually every
The Internal Revenue Service is temporarily shelving its controversial plan to fingerprint tax preparers, IRS Commissioner Doug Shulman said Tuesday. Speaking at the American Institute of CPAs’ National Tax Conference, Shulman described some of the IRS’s latest moves, including ones influenced by the AICPA. The AICPA wrote to Shulman last month asking the agency
In the wake of studies that found that tax returns filed by paid preparers can be riddled with mistakes, the Internal Revenue Service is clamping down on the industry. Up to now, paid tax preparers in the vast majority of states were free to hold themselves out as experts without any training whatsoever. Nor did they
Plan Now to Get Full Benefit of Saver’s Credit; Tax Credit Helps Low- and Moderate-Income Workers Save for Retirement
IR-2011-121, Dec. 16, 2011
WASHINGTON — Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2011 and the years ahead, according to the Internal Revenue Service.
The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.
Eligible workers » Read more..
Starting Jan. 1: Tax Preparers Need to File Due Diligence Checklist with All Earned Income Tax Credit Claims
IR-2011-122, Dec. 20, 2011
WASHINGTON — The Internal Revenue Service today issued final regulations requiring paid tax return preparers to file a due diligence checklist, Form 8867, with any federal return claiming the Earned Income Tax Credit (EITC). This is the same form that is currently required to be completed and retained in a preparer’s records.
The due diligence requirement, enacted by Congress over a decade ago, was designed to reduce errors on returns claiming the EITC, most of which are prepared by tax professionals. The IRS created Form 8867, Paid Preparer’s Earned Income Credit Checklist, to help preparers meet the requirement by obtaining eligibility information from their clients. Preparers have » Read more..
R-2011-118, Dec. 15, 2011
WASHINGTON — Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years. Some of these changes include the following:
Special Charitable Contributions for Certain IRA Owners
This provision, currently scheduled to expire at the end of 2011, offers older owners of individual retirement accounts (IRAs) a different way to give to charity. An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charity. This option, created in 2006, is available for distributions from IRAs, regardless of whether the owners itemize their deductions. Distributions from employer-sponsored retirement plans, » Read more..
R-2011-120, Dec. 16, 2011
WASHINGTON — Tax-exempt organizations with January and February filing due dates will have until March 30, 2012, to file their annual returns, the Internal Revenue Service announced today.
The IRS is granting this extension of time to file because the part of the e-file system that processes electronically filed returns of tax-exempt organizations will be off-line during January and February. The agency stressed that the rest of the e-file system will continue to operate normally and urged all individuals and businesses to choose the accuracy, speed and convenience of electronic filing.
In general, the extension applies to tax-exempt organizations whose normal filing deadline is either Jan. 17 or Feb. 15, 2012. Ordinarily, these deadlines would apply to organizations with a fiscal year that ended on Aug. 31 or Sept. 30, 2011, respectively. The extension also applies to organizations that already obtained an initial three-month filing extension and now have an extended filing deadline that falls on Jan. 17 or Feb. 15, 2012. The majority of tax-exempt organizations will be unaffected by this extension because they operate on a calendar-year basis and have a May 15 filing deadline.
In order to avoid receiving a late filing penalty notice, a reasonable cause statement should be attached to the tax return. If organizations receive late-filing penalty notices, they should contact the IRS so that these penalties can be abated. The IRS encouraged these organizations to consider either e-filing early — before the end of December — or waiting until March to file electronically.
Further details are in Notice 2012-4, posted today on IRS.gov.
Prepared Remarks of Douglas H. Shulman, Commissioner of Internal Revenue, Before the IRS/George Washington University 24th Annual Institute on Current Issues in International Taxation, Washington, DC, Dec. 15, 2011
Good afternoon and it’s good to be at the IRS/GW Annual Institute on Current Issues in International Taxation which is now one of the preeminent venues to talk about international tax issues. This is a very important dialogue for all of us who want a healthy U.S. tax system.
Today, I would like to talk about a new sensible and strategic approach to international tax issues. It brings into tight focus efficiency, effectiveness, working smarter and a real-time resolution of issues – which I am working to integrate and apply throughout the IRS’ operations – not just for international tax issues. » Read more..
IRS Return Preparer Office
Scheduling for the Registered Tax Return Preparer test is now available. To schedule an appointment, simply log into your PTIN Account and select “View Next Steps and Outstanding Requirements” from the Main Menu page. From there, select “Schedule a Test or Re-test”. You can schedule and pay for your test online. The test fee is $116.
More information about the test, including study resources and a list of test center locations, is available on the IRS.gov Website. You must take and pass the test by December 31, 2013.
IR-2011-115, Dec. 6, 2011
WASHINGTON—The Internal Revenue Service today announced the standards to become an IRS-approved Continuing Education (CE) Provider and the requirements to become an IRS CE Accrediting organization. The guidance paves the way for the implementation of new CE requirements for certain tax return preparers starting next year.
Individuals who are required to take the Registered Tax Return Preparer competency test before the end of 2013 must begin completing continuing education courses in 2012. The 15-hour annual requirement consists of 10 hours of federal tax law topics, three hours of tax law updates and two hours of ethics and/or professional conduct. Preparers must obtain the courses from IRS-approved providers.
To be an IRS-approved CE Provider, an organization must be one of the following:
- An accredited educational institution,
- Recognized for continuing education purposes by the licensing body of any state or U.S. territory,
- Approved by a qualifying organization as a provider of CE on subject matters designed for registered tax return preparers, enrolled agents, and enrolled retirement plan agents (such qualifying organizations will be known as accrediting organizations), or
- Any other professional organization, society or business recognized by the IRS as a provider of CE on subject matters designed for registered tax return preparers, enrolled agents, and enrolled retirement plan agents.
Any organization that wants to become an accrediting organization can immediately submit the required documentation outlined in section 4 of Revenue Procedure 2012-12 to the address provided in the revenue procedure. Once approved, any accrediting organizations will be publicized by the IRS and must renew their status as accrediting organization with the IRS every three years.
New provider application process
Organizations in all four categories must obtain an IRS CE provider number. Organizations are able to apply through a new on-line process beginning today. As part of the process, continuing education providers are required to pay an annual fee to the third-party vendor selected by the IRS to administer the CE provider application and renewal processes. The fee covers costs to maintain a public listing of all approved providers and to collect course completion information from providers, identifying to the IRS, by PTIN, those attendees who have completed a program. There is no additional IRS fee.
To apply for a provider number and program number(s), organizations should visit: www.irs.gov/taxpros/ce and click on the “Apply to become an IRS Approved CE Provider” link. Assistance for CE Provider questions is available Monday-Fri, 8 a.m. – 8 p.m. EST by calling 855-296-3150 (toll-free) or 202-499-5606.
Preparers who no longer have access to the email addresses associated with their PTIN accounts or who do not remember what email address they used when obtaining a PTIN can now update their email addresses without logging into their accounts.
Simply select “Forgot or Cannot Access Email?” from the Tax Professional PTIN System. Preparers must know their Last Name, Date of Birth, PTIN, Social Security Number, and the answer to their Secret Question in order to use this functionality.
IR-2011-100, Oct. 12, 2011
WASHINGTON — The Internal Revenue Service today advised tax professionals and tax firms that do not have Electronic Filing Identification Numbers (EFINs) to start the process to obtain EFINs now so they can meet new e-file requirements for 2012.
Starting in January 2012, any paid preparer or firm that reasonably anticipates preparing and filing 11 or more Form 1040 series returns, Form 1041 returns, or a combination of Form 1040 series returns and Form 1041 returns generally must use IRS e-file. Their clients who file these forms, however, may independently choose to file by paper.
To become Authorized IRS e-file Providers, preparers must create an e-Services account, submit an EFIN application and pass a suitability check. The approval process can take 45 days or more. For a firm or an individual, only one EFIN is needed.
The 2012 requirement will mark the second and final phase of implementing a law that was intended to boost the electronic filing rate of income tax returns for individuals, trusts and estates. In 2011, the e-file mandate pertained to any paid preparer or firm that anticipated preparing and filing 100 or more returns. The e-file rate by paid preparers increased 12 percent in 2011.
Currently, nearly 80 percent of individual tax returns are filed electronically. The IRS has processed more than 1 billion individual tax returns safely and securely since the nationwide debut of electronic filing in 1990.
Preparers can review the process on IRS.gov at Become an Authorized e-file Provider or find additional guidance at the Frequently Asked Questions section.
If the requirement will cause undue hardship, preparers may seek a one-year waiver by submitting Form 8944, Preparer e-file Hardship Waiver Request. If a client wants to file a paper return, the preparer should include Form 8948, Preparer Explanation for Not Filing Electronically, with the return. A taxpayer choice statement should be obtained and kept with the preparer’s records.
Form 8948 does not have to be submitted with returns that are not currently accepted electronically by the IRS or the IRS has instructed taxpayers not to file them electronically. These returns are exempt from the federal e-file requirement. Other limited exemptions may apply.
A six-digit Identity Protection Personal Identification Number or IP PIN is being provided to those victims of tax-related identity theft who have had their identities verified by IRS to avoid delays in processing their federal returns.
If your client indicates he or she received IRS Letter 4869CS providing them with an IP PIN, please ask your client for the letter and follow the instructions provided when preparing the return. Important: If your client received an IP PIN, please enter it on the tax return to avoid processing delays.
For electronic returns, the software will indicate where to insert the IP PIN. For paper returns, enter the IP PIN in the six boxes to the right of the spouse’s occupation in the signature section.
Tax professionals may send general inquiries to-IPPIN.Questions@irs.gov