New IRS Tax Preparer Rules for 2012

Attorneys, accountants and small business owners take note: New IRS rules for tax preparers went into effect Jan. 1. The new IRS rules include education requirements, background checks, and competency exams for different classes of tax preparers. The changes aim to protect consumers from “the inept and the unscrupulous,” a board member with the California Tax Education Council told BusinessWire. California and Oregon are currently the only states that require tax preparers to meet education and exam requirements. The new IRS rules largely mirror California’s rules, which the state adopted more than 10 years ago. Of course IRS regulations are complicated, and its new rules are no exception. But in general, here are some takeaway points from the new IRS rules: Preparer Tax Identification Numbers (PTINs) are now required for all paid tax preparers — including attorneys, certified public accountants, certified registered tax preparers, and enrolled agents. However, the online PTIN application system will be down for more than two weeks of maintenance, starting at 5 p.m. Eastern Time on Dec. 23, until about 6 a.m. Eastern Time on Jan. 9, the Journal of Accountancy reports. Continuing education is now required for all nonexempt tax preparers — those who are not attorneys, CPAs, or EAs. The new IRS rules require 15 hours of continuing education each year. A competency exam and background check are now required for all nonexempt tax preparers. But the IRS is giving nonexempt preparers until 2013 to complete these requirements. A “due diligence checklist,” Form 8867, must be filed by tax preparers for each client who claims the Earned Income Tax Credit. Details on the new IRS rules for tax preparers are available at the IRS website, www.irs.gov . Related Resources: Tax Preparers Required to File Checklist with EITC Claims (Accounting Today) New IRS Rules for Tax Preparers (FindLaw) Texas Tax Preparers Face IRS Scrutiny and Criminal Prosecution (FindLaw) Tax Tip: Choosing a Tax Preparer or Tax Attorney (FindLaw’s Common Law)

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New IRS Tax Preparer Rules for 2012

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