The IRS has not yet published a start date, but all indications are that it will be November, and possibly early November. A candidate information bulletin has been published. Here is the link:
http://www.irs.gov/pub/irs-utl/rtrpcandidateinfobulletin.pdf
The IRS site says that "Test scheduling is not available until November."
It seems the start is near.
http://www.taxpreparerlearningsystems.com/
Monday, October 31, 2011
Tuesday, October 11, 2011
Concerning Being a Supervised Tax Preparer
Details Concerning Being a Supervised Tax Preparer
As you know, there are new IRS rules concerning tax return preparers. To begin with, all tax return preparers must get a Preparer Tax Identification Number (PTIN).
Only some tax preparers will be eligible to be considered a Registered Tax Return Preparer (RTRP). Those who will become Registered Tax Return Preparers will need to pass an IRS sponsored competency exam. In addition to the competency test, RTRPs will also need to take continuing education each year, starting in 2012.
Certain PTIN holders are exempt from the competency testing and continuing education requirements. The first group of exempt preparers includes attorneys, CPAs, enrolled agents, enrolled retirement plan agents, and enrolled actuaries. Another is those individuals who do not prepare Form 1040 series returns.
And finally, another group of PTIN holders who are exempt from competency testing and continuing education are “supervised preparers”. Supervised preparers are individuals who do not sign the tax return as a paid preparer, and who are not required to sign tax returns as a paid preparer. These individuals must be supervised by an attorney, CPA, or enrolled agent, who owns at least 80% of the firm, and who sign the return.
So this brings into question of who is required to sign as a paid preparer. It is not simply a matter of preparers not signing any returns, and then simply having a supervising attorney, CPA, or enrolled agent sign the return. IRS rules state “the individual preparer who has the primary responsibility as between or among the preparers for the overall substantive accuracy of the preparation of such return or claim for refund shall be considered to be the income tax return preparer” for purposes of signing the return.
That means that unless the supervising attorney, CPA, or enrolled agent has primary responsibility for the determination of the tax shown on the return, they should not sign the return. The supervising attorney, CPA, or enrolled agent would need to make inquiries, and have enough understanding of the client in order to make a knowledgeable judgment that the return is correct. It would not seem to be enough for the supervisor to simply rely on the judgment of another preparer.
Penalties apply if the preparer who has primary responsibility for the substantive accuracy of the return does not sign the return.
More details at http://www.taxpreparerlearningsystems.com/
Monday, September 5, 2011
RTRP Exam Start Date
The Internal Revenue Service continues to say that the Registered Tax Return Preparer competency exam will be available starting in October. We have not seen a specific start date, but the Service has been consistent in sticking with the October 2011 start. We continue to monitor any news regarding the exam, and will update if any new information is released. Good luck with your preparations.
Sunday, August 7, 2011
House Oversight Subcommittee Hearing Comments
On July 28, 2011. the House Ways and Means Committee - Subcommittee on Oversight held a hearing to review the progress of the return preparer program. Among those who testified were representatives of the National Association of Tax Professionals, American Institute of Certified Public Accountants, National Association of Enrolled Agents, H&R Block, and others. Also testifying was David Williams of the IRS Return Preparer Office.
A great deal of support for the steps that the Internal Revenue Service has taken was voiced, along with some concerns.
The National Association of Tax Professionals (NATP) testified. Their representative expressed great concern that the changes to Circular 230 related to Registered Tax Return Preparers (RTRP) create an uneven playing field for non-legacy (other than attorneys, CPAs, and Enrolled Agents) tax preparers. Specifically, there is concern that RTRPs will not be able to adequately provide advice to clients pursuant to Section 10.3(f)(3) of Circular 230. Concern was also voiced that the exceptions carved out for those supervised by attorneys, CPAs, and Enrolled Agents again creates competitive disadvantages for some of the preparer community. http://waysandmeans.house.gov/UploadedFiles/Cinquemani.NATP_testimony_July_28.pdf
The National Association of Enrolled Agents (NAEA) was concerned that the upcoming competency exam will test the Form 1040 series only, while there will be no testing of non-Form 1040 type returns. At the same time, preparers can prepare non-Form 1040 without any testing of their competency. NAEA also was concerned regarding the promotion and enforcement elements of the program. http://waysandmeans.house.gov/UploadedFiles/Gary_Testimony728.pdf
H&R Block testified and stated that the IRS competency exam is redundant to the H&R Block program related to their own tax preparers. They also expressed a desire for the implementation of a group registration program. http://waysandmeans.house.gov/UploadedFiles/PickeringHRBlock.pdf
The hearing showed broad support for the IRS certification program, but also a number of concerns. From the various perspectives of those who testified, special concerns were voiced. Our community, the tax return preparer community, is diverse, so some diversity of opinion is to be expected.
Tax Preparer Learning Systems, LLC
www.taxpreparerlearningsystems.com
A great deal of support for the steps that the Internal Revenue Service has taken was voiced, along with some concerns.
The National Association of Tax Professionals (NATP) testified. Their representative expressed great concern that the changes to Circular 230 related to Registered Tax Return Preparers (RTRP) create an uneven playing field for non-legacy (other than attorneys, CPAs, and Enrolled Agents) tax preparers. Specifically, there is concern that RTRPs will not be able to adequately provide advice to clients pursuant to Section 10.3(f)(3) of Circular 230. Concern was also voiced that the exceptions carved out for those supervised by attorneys, CPAs, and Enrolled Agents again creates competitive disadvantages for some of the preparer community. http://waysandmeans.house.gov/UploadedFiles/Cinquemani.NATP_testimony_July_28.pdf
The National Association of Enrolled Agents (NAEA) was concerned that the upcoming competency exam will test the Form 1040 series only, while there will be no testing of non-Form 1040 type returns. At the same time, preparers can prepare non-Form 1040 without any testing of their competency. NAEA also was concerned regarding the promotion and enforcement elements of the program. http://waysandmeans.house.gov/UploadedFiles/Gary_Testimony728.pdf
H&R Block testified and stated that the IRS competency exam is redundant to the H&R Block program related to their own tax preparers. They also expressed a desire for the implementation of a group registration program. http://waysandmeans.house.gov/UploadedFiles/PickeringHRBlock.pdf
The hearing showed broad support for the IRS certification program, but also a number of concerns. From the various perspectives of those who testified, special concerns were voiced. Our community, the tax return preparer community, is diverse, so some diversity of opinion is to be expected.
Tax Preparer Learning Systems, LLC
www.taxpreparerlearningsystems.com
Friday, July 22, 2011
Tax Return Preparer PTIN and Other Regulation Issues
OK, we are fools for the acronym. In case you are not into them like us, PTIN stands for Preparer Tax Identification Number. PTIN's are required for all of us who prepare, or help to prepare, all or substantially all of a federal return, or claim for refund. That means just about all of us need to apply for a PTIN on an annual basis.
It is interesting to note that nearly all of us in the return preparer community need to apply each year for a PTIN. However, from that point onward, there are different rules for us depending on our status. For example, CPA's need to have a PTIN, but they are not required to take the upcoming competency exam, or comply with the IRS continuing education requirements.
The phrase Registered Tax Return Preparer (RTRP) is a designation that no one, at this point in time, qualifies for. If you see anyone using the phrase to describe themselves, they should be advised to stop doing so. Only those PTIN holders who have passed the competency testing, and the suitability check, will be considered RTRP's. In other words, it is a special group of people who will hold the designation.
Getting back to PTIN issues, here are some of the newer developments:
More information at: http://www.taxpreparerlearningsystems.com/
It is interesting to note that nearly all of us in the return preparer community need to apply each year for a PTIN. However, from that point onward, there are different rules for us depending on our status. For example, CPA's need to have a PTIN, but they are not required to take the upcoming competency exam, or comply with the IRS continuing education requirements.
The phrase Registered Tax Return Preparer (RTRP) is a designation that no one, at this point in time, qualifies for. If you see anyone using the phrase to describe themselves, they should be advised to stop doing so. Only those PTIN holders who have passed the competency testing, and the suitability check, will be considered RTRP's. In other words, it is a special group of people who will hold the designation.
Getting back to PTIN issues, here are some of the newer developments:
- 2012 PTIN sign up program will begin around October 2011.
- The PTIN will now be good for an annual basis. Previously, the PTIN was good at the time of registration.
- PTIN application questions will be revised, and will now allow the following individuals to identify themselves:
- Supervised, non-signing preparers who report to CPA, attorneys, or enrolled agents.
- Those who do not preparer any Form 1040 series returns.
More information at: http://www.taxpreparerlearningsystems.com/
Monday, July 11, 2011
Continuing Education Requirements
The IRS has given some clarification on the upcoming continuing education (CE) requirements that are part of the Registered Tax Return Preparer initiative that is rolling out.
The CE requirement for those who are pegged to take the competency exam and become Registered Tax Return Preparers is slated to begin in 2012. Once the requirement begins, even those who have not yet taken the competency test will need to meet the CE requirements. That means that we cannot put off the CE requirement by delaying the exam.
There is a 15 annual requirement for CE. Three hours of tax update, two hours of ethics, and 10 hours of federal tax laws.
Only IRS-approved providers can provide the courses. No providers have yet been approved.
Since the CE program has not yet started, any courses or education taken to this point will not count towards your 2012 requirement.
http://www.taxpreparerlearningsystems.com/
The CE requirement for those who are pegged to take the competency exam and become Registered Tax Return Preparers is slated to begin in 2012. Once the requirement begins, even those who have not yet taken the competency test will need to meet the CE requirements. That means that we cannot put off the CE requirement by delaying the exam.
There is a 15 annual requirement for CE. Three hours of tax update, two hours of ethics, and 10 hours of federal tax laws.
Only IRS-approved providers can provide the courses. No providers have yet been approved.
Since the CE program has not yet started, any courses or education taken to this point will not count towards your 2012 requirement.
http://www.taxpreparerlearningsystems.com/
Monday, July 4, 2011
Dependents - In Summary
We need to always take care to pay attention to the details, but there are times when we need to be familiar with subjects at the summary level as well. Dependents in summary (or big picture) can help us prepare to sit for the Registered Tax Return Preparer competency exam.
The biggest picture. To claim someone else as a dependent, they must be either a 1) qualifying child, or 2) qualifying relative. We first try to determine if they are a qualifying child, and then, if not, we determine if they are a qualifying relative. Remember that to be a dependent they must be one or the other; there is no "other" category. The rules for both are different, so look at the tests for qualifying child, and then clear the memory bank and look at the tests for qualifying relative. It is easy to mix up the tests, so discipline is required.
There are five specific tests to be a qualifying child: 1) relationship, 2) residency, 3) age, 4) qualifying child support test, and 5) joint return test (after 2008). Additionally, taxpayer themselves cannot be a dependent of another taxpayer, and they must be a U.S. citizen or resident of U.S., Mexico, or Canada.
There are four specific tests to be a qualifying relative: 1) relationship or full-year residency, 2) gross income test, 3) qualifying relative support test, and 4) taxpayer not a qualifying child. Additionally, taxpayer themselves cannot be a dependent of another taxpayer, and they must be a U.S. citizen or resident of U.S., Mexico, or Canada. The joint return test also applies.
We here at Tax Preparer Learning Systems wish you the best of luck as you navigate the new IRS regulations, and the upcoming test in particular. Additional information is available at http://www.taxpreparerlearningsystems.com/.
The biggest picture. To claim someone else as a dependent, they must be either a 1) qualifying child, or 2) qualifying relative. We first try to determine if they are a qualifying child, and then, if not, we determine if they are a qualifying relative. Remember that to be a dependent they must be one or the other; there is no "other" category. The rules for both are different, so look at the tests for qualifying child, and then clear the memory bank and look at the tests for qualifying relative. It is easy to mix up the tests, so discipline is required.
There are five specific tests to be a qualifying child: 1) relationship, 2) residency, 3) age, 4) qualifying child support test, and 5) joint return test (after 2008). Additionally, taxpayer themselves cannot be a dependent of another taxpayer, and they must be a U.S. citizen or resident of U.S., Mexico, or Canada.
There are four specific tests to be a qualifying relative: 1) relationship or full-year residency, 2) gross income test, 3) qualifying relative support test, and 4) taxpayer not a qualifying child. Additionally, taxpayer themselves cannot be a dependent of another taxpayer, and they must be a U.S. citizen or resident of U.S., Mexico, or Canada. The joint return test also applies.
We here at Tax Preparer Learning Systems wish you the best of luck as you navigate the new IRS regulations, and the upcoming test in particular. Additional information is available at http://www.taxpreparerlearningsystems.com/.
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