How much does your tax pre?parer really know?? ? In the past, any?body, whether they knew what they were doing or not, could pre?pare taxes for money. In 2011 the IRS began a pro?gram designed to bring unli?censed pre?par?ers into the fold.? All tax pre?par?ers are now sub?ject to Cir?cu?lar 230, but imple?men?ta?tion does not hap?pen over night.? In advance of test?ing tax pre?par?ers for their knowl?edge, the IRS issued a num?ber of pro?vi?sional Pre?parer Tax Iden?ti?fi?ca?tion Num?bers (PTINs), so that peo?ple in the tax prepa?ra?tion busi?ness could con?tinue to work, while they waited for the RTRP com?pe?tency exam to come online. Hun?dreds of thou?sands of unli?censed tax pre?par?ers renewed their PTINs in advance of the test?ing start date, obtain?ing the abil?ity to pre?pare tax returns with?out demon?strat?ing their com?pe?tency. Peo?ple who obtain pro?vi?sional PTINs have until Decem?ber 31, 2013 to pass the Reg?is?tered Tax Return Pre?parer (RTRP) Exam.
The IRS rolled out RTRP exam some time ago, and once the exams started the IRS stopped issu?ing pro?vi?sional PTINs. Only peo?ple who pass the exam can use the RTRP des?ig?na?tion.? Just like Enrolled Agents (EAs), the IRS main?tains a list of peo?ple who hold the RTRP des?ig?na?tion as well, so you can check to see if your pre?parer is licensed.
The RTRP exam only cov?ers series 1040 tax returns.? Those PTIN hold?ers who swear they will not pre?pare series 1040 tax returns will still be able to pre?pare other kinds of tax returns with out demon?strat?ing their com?pe?tency to pre?pare those other kinds of tax returns, as the IRS has not cre?ated exams for those other kinds of tax returns and may not do so for some time to?come.
How many RTRPs are there now? The Mem?ber Con?nect por?tion of the National Soci?ety of Accoun?tants Web site reported that as of late Sep?tem?ber 2012, the?Return Pre?parer Office of the IRS had issued 20,514 cer?tifi?cates to new RTRPs and the total num?ber of peo?ple who still needed to pass the com?pe?tency exam was 327,000. Those pro?vi?sional PTIN hold?ers are not break?ing down the doors to prove they know what they are doing; since licens?ing started, only 6% of pro?vi?sional PTIN hold?ers have both?ered to get licensed.
What do you need to know to pro?tect yourself?
If your paid tax pre?parer does not have a PTIN and refuses to sign with one, you need to be very sus?pi?cious; they are break?ing the?law.
Even if your paid tax pre?parer has a PTIN, but they do not have a license, such as an EA, or RTRP, they have not demon?strated their com?pe?tency to pre?pare your indi?vid?ual tax return. All pro?vi?sional PTIN hold?ers can pre?pare any tax return through 2013; sure, they are sup?posed to know what they are doing, and can lose their PTIN if they wind up in front to the IRS for doing a bad job, but that will not help you, after the?fact.
Remem?ber, if you have other kinds of tax returns you need pre?pared, and if you want to be sure the tax pre?parer has demon?strated some com?pe?tency to pre?pare that kind of tax return, you will want to hire an EA, the tax spe?cial?ists, or CPA or attor?ney who spe?cial?izes in tax issues.? An RTRP or unli?censed PTIN holder has not demon?strated com?pe?tency to pre?pare these other kinds of tax returns can still do so; again, even an unli?censed tax pre?parer is sup?posed to know what they are doing, and can lose their PTIN if they wind up in front to the IRS for doing a bad job, but that will not help you, after the?fact.
You are the one sign?ing that the tax return is true and cor?rect to the best of your knowl?edge; you will be respon?si?ble for what?ever your tax pre?parer does with your tax return.
As always, small busi?ness ser?vices and tax?a?tion are our busi?ness.? If you need help with taxes, or other ser?vices,? Please give Art & Busi?ness Con?sult?ing a call.? We would love to engage you as a client.
Jake Beck?man, EA & Chief Small Busi?ness Prob?lem Solver at Art and Busi?ness Consulting?LLC
The usual dis?claimers: Although ABC has made every effort to insure the accu?racy of Taxes, Tips and Tools, mis?in?for?ma?tion, dis?in?for?ma?tion, changes, mis?takes, typos and hack?ers hap?pen, there?fore Art & Busi?ness Con?sult?ing LLC takes no respon?si?bil?ity for any action taken or results based on the infor?ma?tion sup?plied here in. The con?tent of this blog gen?er?ally applies to busi?ness and indi?vid?ual tax?a?tion in the United States of Amer?ica.? Inter?nal Rev?enue Ser?vice Cir?cu?lar 230 Dis?clo?sure:? As pro?vided for in Trea?sury reg?u?la?tions, advice (if any) relat?ing to fed?eral taxes that is con?tained in this com?mu?ni?ca?tion (includ?ing attach?ments) is not intended or writ?ten to be used, and can?not be used for the pur?pose of (1) avoid?ing penal?ties under the Inter?nal Rev?enue Code or (2) pro?mot?ing, mar?ket?ing or rec?om?mend?ing to another party any plan or arrange?ment address herein.? Art & Busi?ness Con?sult?ing LLC cur?rently does not have a cer?ti?fied pub?lic accoun?tant, human resource spe?cial?ist, cer?ti?fied finan?cial plan?ner or an attor?ney on staff; this infor?ma?tion is purely for edu?ca?tional pur?poses and not to be con?strued as legal or finan?cial advice. Art & Busi?ness Con?sult?ing LLC and its employ?ees, mem?bers and asso?ciates are not engage to prac?tice law; you always should dis?cuss legal mat?ters with your attor?ney before talk?ing to anyone?else.
Tags: EA, enrolled agent, individual taxes, PTIN, RTRP, tax implications, Tax preparation competency, Tax Return Preparation
Source: http://artandbusinessconsulting.com/blog/how-much-does-your-tax-preparer-really-know/
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