New Tax Preparer Rules Do Not Impact Enrolled Agents

At the beginning of this year, the IRS announced the initiation of new efforts to educate tax preparers and enforce regulations.

They recommended that:

• All paid tax return preparers register with the IRS and obtain a PTIN (preparer tax identification number).
• Competency tests would be required for paid tax return preparers, including continuing education.
• The important factor is that these new tax preparer rules do not impact enrolled agents.

The IRS has indicated that it will take several years to implement these proposals. They have sent letters to over 10,000 tax preparers this year, reminding them to check areas that have the most errors. These areas include the Schedule C, Schedule A, Income Tax Credits, and the First Time Home Buyer credit.

The IRS believes that most tax return preparers are honest and professional, providing exceptional service to their clients. IRS commissioner Shulman suggested the following for taxpayers to keep in mind when choosing a tax return preparer:

• Steer clear of tax return preparers who work on a percentage of the refund
• Check the tax return preparer’s credentials to determine how long they have prepared taxes and in what capacity.
• Be very cautious of tax return preparers claiming they can obtain larger refunds.

New Tax Preparer Rules Do Not Impact Enrolled Agents

An enrolled agent can sign documents for a taxpayer and is able to practice before the IRS. They are licensed and are required to pass a broad exam covering the tax code in its entirety.

Those that have worked for the IRS for at least five years in a capacity of interpreting tax code can also become licensed enrolled agents. In addition, 72 hours of continuing education is required to maintain their license.

This stringent education and experience requirement is the main reason that the new tax preparer rules do not impact enrolled agents.

Tax return preparers such as CPAs (Certified Public Accountants) and attorneys are exempt from these new rules. All other non-exempt paid tax return preparers will be required to obtain the PTIN (preparer tax identification number).

The IRS believes that these new tax preparer rules will help protect the taxpayer and ultimately reduce the number of errors they find.