New IRS Filing Season Program Unveiled for Tax Return Preparers

[JRS]

WASHINGTON —  The Internal Revenue Service announced today that guidance will soon be issued outlining a new voluntary program designed to encourage education and filing season readiness for paid tax return preparers. The program will be in place to help taxpayers during the 2015 filing season.

The Annual Filing Season Program will allow unenrolled return preparers to obtain a record of completion when they voluntarily complete a required amount of continuing education (CE), including a course in basic tax filing issues and updates, ethics, and other federal tax law courses.

"This voluntary program will be a step to help protect taxpayers during the 2015 filing season,” said IRS Commissioner John Koskinen. “About 60 percent of tax return preparers operate without any type of oversight or education requirements. Our program will give unenrolled return preparers a way to stay to up-to-date on tax laws and changes, which we believe will improve service to taxpayers.”

Tax return preparers who elect to participate in the program and receive a record of completion from the IRS will be included in a database on IRS.gov that will be available by January 2015 to help taxpayers determine return preparer qualifications.

The database will also contain information about practitioners with recognized credentials and higher levels of qualification and practice rights. These include attorneys, certified public accountants (CPAs), enrolled agents, enrolled retirement plan agents (ERPAs) and enrolled actuaries who are registered with the IRS.

“It’s also important to note this program is not to replace the important tax work done by certified public accountants, enrolled agents and attorneys,” Koskinen said. “Tax professionals with recognized credentials will be publicly listed on IRS.gov, and we plan to help inform taxpayers about the professional options available.”

Anyone who prepares all, or substantially all, of any federal tax return or refund claim for compensation is required to obtain a preparer tax identification number (PTIN). The pending guidance will also explain that tax return preparers with a valid PTIN who do not obtain a record of completion as part of the Annual Filing Season Program, or are not an attorney, CPA, enrolled agent, ERPA, or enrolled actuary, may still prepare tax returns, but will not be included in the public directory.

In 2011, the Treasury Department and the IRS issued regulations that mandated testing and CE for paid tax return preparers and created a Registered Tax Return Preparer (RTRP) credential. The RTRP designation was for preparers with valid PTINs, who passed an IRS competency test and completed 15 hours of CE.

Earlier this year, the Court of Appeals for the D.C. Circuit upheld the lower court’s determination that the IRS regulations from 2011 mandating competency testing and CE for paid tax return preparers were invalid. The IRS continues to believe regulation of paid tax return preparers is important for the proper functioning of the U.S. tax system. To that end, the Administration’s Fiscal Year 2015 Budget includes a proposal to explicitly authorize the IRS to regulate all paid tax return preparers.

Prior to the 2013 court decision, over 62,000 return preparers passed an IRS-administered competency test and completed the requirements to become Registered Tax Return Preparers. The Annual Filing Season Program will exempt RTPRs and others who have successfully completed certain recognized national or state tests from the filing season refresher course that will be required for other participants.

The Annual Filing Season Program will be an interim step to help taxpayers and encourage education for unenrolled tax return preparers. The IRS will assess the feasibility of administering a uniform voluntary examination in future years in order to ensure basic return preparer competency.

Annual Filing Season Program – Record of Completion Requirements

In general, non-exempt return preparers with a valid PTIN for the program year will need to complete 18 hours of CE annually from IRS-approved CE providers to obtain an IRS record of completion. The hours will need to include:

• 6 hours of federal tax filing season refresher course (with a required comprehension test at completion)
• 10 hours of federal tax law topics
• 2 hours of ethics

For the first year, a transition rule will apply to prorate the required hours. For a return preparer to obtain a record of completion for the 2015 filing season, a total of 11 hours will need to be earned in 2014, including the six hour refresher course, three hours of other federal tax law topics, and two hours of ethics.

Once the official guidance is issued, IRS-approved CE providers will begin to offer qualifying federal tax filing season refresher courses. A list of all IRS-approved CE providers is available and includes a new column to indicate which providers are planning to offer the qualifying courses. The list is updated daily. For 2015, qualifying courses will be offered through December 31, 2014.

The IRS will begin issuing records of completion to those who have met the requirements in mid-October 2014 after the 2015 PTIN renewal season starts.

Consent to Circular 230 restrictions

As a prerequisite to receiving a record of completion, an individual will be required to consent to the duties and restrictions relating to practice before the IRS in subpart B and section 10.51 of Treasury Department Circular No. 230.

Modification to limited practice permissions

The pending guidance will also announce that effective for tax returns and claims for refunds prepared or signed after December 31, 2015, only unenrolled tax return preparers who have a record of completion under the Annual Filing Season Program for the calendar year of preparation and the calendar year of representation will be permitted to represent taxpayers before the IRS during an examination of a return that they signed or prepared. 

Attorneys, CPAs, and enrolled agents will continue to have unlimited representation rights and can represent clients before any office of the IRS.

[jklcpa]

This will almost certainly be challenged, and it does nothing to solve the problem of unethical preparers.  http://www.accountingtoday.com/news/irs_watch/aicpa-says-irs-voluntary-tax-preparer-certification-program-is-unlawful-71073-1.html

 

Full test for those that don't like clicking links:

 

The American Institute of CPAs has sent a letter expressing strong concern with the Internal Revenue Service’s proposed voluntary certification program for tax return preparers, saying it “would cause significant legal problems that may ultimately frustrate the IRS’s goals, confuse the public, and lead to litigation.”

 

The AICPA expressed its concerns to IRS commissioner John Koskinen in a meeting and letter last month, but has increased its level of concern in the latest letter (see AICPA Opposes IRS Voluntary Tax Preparer Certification).

 

In a letter Tuesday to Koskinen, AICPA chairman Bill Balhoff and AICPA president and CEO Barry C. Melancon wrote, “We have repeatedly expressed to you and your colleagues that our members have very significant concerns regarding a voluntary certification program and urged the IRS to have a formal comment period to obtain and consider the public’s views prior to moving forward. … However, it is our understanding that the IRS has no intention of slowing down or considering viable alternatives. Therefore, we feel compelled to consider our next steps, and to raise more formally our legal and policy concerns with the IRS’s current path.”

 

Under the proposed voluntary program, tax return preparers would receive an IRS certificate for display in return for completing a continuing education program that includes a comprehension assessment.

 

The AICPA’s letter emphasizes the following points:

• First, no statute authorizes the proposed program;

• Second, the program will inevitably be viewed as an end-run around Loving v. IRS, (a federal court ruling rejecting an earlier IRS attempt to regulate tax return preparers);

• Third, the IRS has evidently concluded, in developing the proposed program, that it need not comply with the notice and comment requirements of the Administrative Procedure Act. This is incorrect; and

• Finally, the current proposal is arbitrary and capricious because it fails to address the problems presented by unethical tax return preparers, runs counter to evidence presented to the IRS, and will create market confusion.

 

Describing the proposed program as “unlawful and improper,” the June 24 letter stated that it is essential that any regulatory approach instituted by the IRS to address this issue has a firm legal basis and reflects sound policy. “We continue to believe that additional regulation of tax return preparers might yield significant benefits and that the IRS can achieve these objectives while remaining consistent with Loving and other statutory limitations on the IRS’s authority,” the letter stated.

 

“We have sought to work with the IRS to achieve workable solutions to regulate tax return preparers and protect the public, and we stand ready to continue these efforts,” the AICPA wrote.

[Jack from Ohio]

I am still an RTRP.  I get my CPE as a secondary benefit to the learning I get from classes, etc.  I have no reason to do any more "signing up" for anything till I take and pass my E.A. exam. 

 

This is just camouflage to make it seem like, to the uninformed, low information and apathetic people of America, that the IRS is doing something.

[kcjenkins]

I find the "Comments" much more valuable than the article itself.