May 24, 2010
Kristy Maitre, the IRS Senior Practitioner Liaision for Iowa, has sent along some information that will be very helpful for practitioners. Apparently, David Williams, IRS director for electronic tax administration and refundable credits, spoke at a May 21 webinar that the National Society of Accountants sponsored. During the webinar, Mr. Williams made the following points:
- IRS is relaxing (for one year) the e-file mandate that the Congress included in the Worker, Homeownership, and Business Assisatance Act of 2009. That law requires electronic filing by "large" firms - defined as those firms that expect to file more than 10 returns in 2011. Under the IRS approach, electronic filing will be required in 2011 for those preparers that expect to file 100 or more returns. The more than 10 rule will be enforced beginning in 2012.
- Under proposed regulations, all paid return preparers must obtain a PTIN. The registration process for new PTIN registrations are targeted to begin by September 1, with the fee pegged in the range of $75 to $300. IRS is also considering reducing or off-setting the enrolled agent fee.
- IRS anticipates that by mid-2011, an automatic tax compliance check will be implemented. That will allow IRS to verify whether the applicant is in collections status.
- IRS is planning on making available by mid-2011 two types of open book competency exams - one for wage and non-business Form 1040 returns, and another covering wage and small-business Form 1040 returns. Applicants with a PTIN would have until the end of their three-year "validity window" to take and pass one of the exams. Williams noted that the exam requirement does not apply to preparers who are already subject to Circular 230 requirements. While the competency exam is required only upon securing a PTIN, return preparers will then have to complete 15 hours of continuing education each year, including 3 hours of federal tax law updates and 2 hours of ethics.
We'll keep you updated with any further developments that we receive.