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 8867, with any federal return claiming the Earned Income Tax Credit (EITC). It 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. » Read more..

EITC Preparer Compliance – Targeted, Tailored and Tiered

According to the latest IRS release, because of the multiple system abuse by taxpayers and tax preparers not doing their due diligence when it comes to EITC the following steps will be necessary to stop system wide abuse.

This is what they will do for 2012 tax season: 

It’s

 Why Have a Preparer Compliance Program?

We estimate 24 to 29 percent of all EITC claims have some type of mistake which costs the government $13 billion to $16 billion each year. » Read more..

Tax Preparers who already have a PTIN from the IRS do not have to pass the exam until Dec. 31, 2013

The Internal Revenue Service released the specifications on Tuesday for the  competency test that individuals must pass to become a Registered Tax Return Preparer.

The test is part of an ongoing effort by the IRS to enhance its oversight of the tax preparation industry. That effort began with the requirements for all tax preparers to register with the IRS and receive a Preparer Tax Identification Number, or PTIN, for this tax season. The other components of the IRS requirements include testing and continuing education.

Preparers who pass this test, along with a background check and tax compliance check, as well as complete 15 hours of continuing education annually will have a new designation: Registered Tax Return Preparer.

The specifications identify the major topics that will be covered by the test, which will be available starting » Read more..

This article written by Kelly Phillips Erb

It’s not just the kids that have to take tests these days. Attorneys, CPAs, doctors, engineers, architects and nurses must generally pass standardized competency tests in order to practice. You can now add tax professionals to the list.

Over the past year, the IRS has made increased oversight of tax professional a top priority. As a first step, the IRS began requiring tax professionals to register for a PTIN (Preparer Tax Identification Number) in 2010 for the 2011 season. » Read more..