Archive for September 29, 2011

Tax Preparers Must Prove Skills to IRS but Some are Exempt

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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 have to prove any minimum level of competency.

First up, beginning next month, the IRS is rolling out competency tests for hundreds of thousands of tax preparers nationwide. Next year, continuing education requirements – 15 hours worth per year – kick in. » Read more..

How to Play Hardball with IRS Examiners by Peter J Reilly

Hard ball

Document requests from examiners when audits are initiated will often seem rather intimidating.  When representing substantial clients, we often attempt to actually give them everything they ask for in a neatly cross-referenced  book.  Knock on wood, that has resulted in quite a few no-changes in the last several years.  Exams is the paper tiger of the IRS.  They can drive a taxpayer who wants to be compliant insane, but they can’t really do anything to you other than ultimately send you a bill in the form of a statutory notice of deficiency. You have ninety days to appeal that determination in Tax Court.  » Read more..

IRS to Begin Fingerprinting Tax Preparers

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The Internal Revenue Service plans to start fingerprinting thousands of tax preparers as part of its oversight program and run the fingerprints through an FBI database.

The IRS released more details on its tax preparer oversight program on Wednesday, and said registered tax return preparers would now be required to renew their Preparer Tax Identification Numbers on an annual basis. In addition, the 15-hour continuing education requirement will take effect next year. » Read more..

IRS Issues Specifications for Tax Preparer Exam

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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..

Back to School: Do Tax Preparer Exams Keep Taxpayers Safe?

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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..

IRS Gives Filing Extension to Taxpayers Whose Preparers Were Affected by Hurricane Irene

Disaster Relief Services for CPA

IRS Provides Tax Relief to Victims of Hurricane Irene

Updated 9/15, 9/14, 9/13, 9/12, 9/9, 9/8,  9/7, 9/2 2011 with expanded federal disaster area.

IR-2011-87, Sept. 1, 2011

WASHINGTON –– The Internal Revenue Service is providing tax relief to individual and business taxpayers impacted by Hurricane Irene.

The IRS announced today that certain taxpayers in Connecticut, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Puerto Rico and Vermont will receive tax relief, and other locations are expected to be added in coming days following additional damage assessments by the Federal Emergency Management Agency (FEMA).

The tax relief postpones certain tax filing and payment deadlines to Oct. 31, 2011. It includes corporations and businesses that previously obtained an extension until Sept. 15, 2011, to file their 2010 returns and individuals and businesses that received a similar extension until » Read more..

IRS Issues Guidance on Tough New Reporting Requirements for Stock Sales in 2010

Professional tax preparation software, 1099 printing, w-2 printing

The IRS will soon be looking over the shoulders of tax return preparers and their clients when they report stock sales on Schedule D, Form 1040

For stock acquired and sold after 2010, the IRS will receive information returns from security brokers reporting the adjusted basis of the stock sold and whether the capital gain or loss on the sale is short-term or long-term. These information returns will allow the IRS to double check what you report for your clients on Schedule D.

The silver lining for your clients is that they will have some control over what their brokers report in certain situations. Your clients should receive information and advice from their brokers about the new rules. However, if there are slip-ups, you are going to have to explain to your clients why their tax bill is higher than they expected. » Read more..