Suitability Checks for RTRP'S

[Edward]

The following from David Williams of IRS on FACEBOOK yesterday: "Almost every one who has a provisional PTIN will be required to undergo a background check before Dec 31, 2013. The check is part of the phase two effort that includes the competency exam. To begin the suitability checks, you must submit fingerprints to an IRS designee so that a FBI criminal background review can be conducted. Also, the IRS will perform a tax compliance check. Here is what's new for late 2011-2012:

The IRS has awarded two contracts to firms that will collect and review fingerprints for the background reviews.

The background checks will begin in the fall, possibly October.

The estimated fee amount for background checks is between $60-90.

Two firms, Prometric Inc and Daon Trusted Identity Services will provided fingerprinting and FBI background review services. Prometric also will be administering the competency exam so preparers can complete both tasks at once. Daon will designate 450 "The UPS Store" locations nationwide as fingerprint collection points. Daon will handle fingerprint collection and background services only.

The suitability check is a critical part of the compliance effort. Circular 230 states that if the suitability check uncovers "disreputable conduct" then the individual is not eligible to become a Registered Tax Return Preparer and therefore not eligible to legally prepare 1040 tax returns. The IRS, not the vendors, will make that determination. If you have outstanding tax issues, we urge you to get the issues resolved immediately, before taking part in the tax compliance check."

[TAXBILLY]

Interesting how antagonists become bed fellows:

http://parcelindustry.com/ME2/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=BB2E4826DA624DE5AAC040CCA1F4BA75

taxbilly

[bstaxes]

Boy this pi$$ed me off. Fingerprints, I was fingerprinted for teaching each time I changed districts, I was fingerprinted for ERO. I am still waiting for the results of my fingerprints to teach from 6 years ago from one of the digital concerns, the state police did a better job. Now more money for fingerprinting. "The UPS Store" is not located near me at all. Another expense to get to it. I am beginning to think is it worth being a tax preparer??? The clients can be funny, but the IRS is hestical.

Thanks for letting me vent.

[Lion EA]

Get fingerprinted by Prometric when you get tested; two birds with one trip.

By the way, why not go for an EA instead of an RTRP? Not that that choice has anything to do with fingerprints.

[jainen]

>>the IRS is hestical<<

From context, I think you mean this in a pejorative way. But I'm not sure of the precise meaning. Is "hestical" a euphemism for some unspeakable concept, an accidental misspelling of soft c where a hard c is required, a poetic substitution of a rhyming word, a new word for something that exceeds anything ever described before, an ancient word for something that hasn't been seen in ages, an anagram for list ache, simple fantasy, a drug-induced hallucination, or some other verbalism?

[joanmcq]

Hey, I was fingerprinted and had a background check just to get a license to sell cars. I think our profession, what with sensitive financial data and the amount of faith our clients put in us to prepare statements (tax returns) that are signed under penalty of perjury should require at least the same level of non-criminality as a car salesman/woman. Doncha think?

[Jack from Ohio]

The part that chaps my backside is the fact that I had the same fingerprinting and background check to get my EFIN number. Yet our government run agency cannot share that information between departments within the same organization.

Our government agencies at their best!!

And this is the same government that wants us to believe they can manage our healthcare and it be done properly?? :dunno:

[joanmcq]

Well they do manage our healthcare if you have medicare, and a lot of seniors seem to like it.

Yeah, sharing across different parts of the agency would be nice, but that might be a bit much to ask for. Like if I fax a POA directly to the Taxpayer Advocate, do ya think she might enter the darn thing so I don't have to fax to CAF too? Maybe next year they will be set up to cross reference so that you'll only need one set of prints. In fact, that might be a good thing to bring up to your Practitioner's Liasion. That is their job: to kind of mediate between the IRS & practioners.

[Jack from Ohio]

Well they do manage our healthcare if you have medicare, and a lot of seniors seem to like it.

If that is the definition of administering something properly, then there is no complaint about how our government is spending our debt?

I am certain that "a lot of people like it" would fit the frivilous and reckless spending of trillions of deficit dollars...??

[joanmcq]

No the admin isn't the best; not enough checks on fraud and the big givaway to Big Pharma when the drug benefit was added (the drug benefit BTW was really not out of concern for seniors, but pandering for votes and a way to further bankrupt the program, so that the Neo-cons could tout a reason to gut the social welfare programs). Now if Medicare could bargain for drugs the way private insurers do, how much less would the government pay for drugs? By my one month of being w/o insurance and seeing the difference between what I paid for generics and what the ins companies pay was really opened my eyes. But at least medicare keeps our seniors from going bankrupt becoming indigent for lack of medical care.

Look, I am frustrated not with government, which really is a necessity, but with politics and ignorance. Now I know the registration is a big pain for those of you who haven't had to do anything in the past to declare yourself a tax preparer (and some of you do go above and beyond to learn and keep up with changes, etc but there is a vast group out there who don't), but licensing, exams, CPE requirements, and Circular 230 are things that EAs, CPAs, and tax attorneys have had to deal with since we got our licenses. In CA & OR there are licensing requirements, but the costs (although in CA, not the PITA factor for CPE it seems; although they require mcuh less than I need). So I view this as a leveling out. Some of this stuff is why CPAs and EAs really have to charge more; it's just damn more expensive keeping up with education and licensing. So put on your big girl & boy panties and suck it up. IMHO it's been a travesty that for the most part tax preparers have been under less oversight than the barbers we joke about giving tax advice.

[Jack from Ohio]

Look, I am frustrated not with government, which really is a necessity, but with politics and ignorance. Now I know the registration is a big pain for those of you who haven't had to do anything in the past to declare yourself a tax preparer (and some of you do go above and beyond to learn and keep up with changes, etc but there is a vast group out there who don't), but licensing, exams, CPE requirements, and Circular 230 are things that EAs, CPAs, and tax attorneys have had to deal with since we got our licenses. In CA & OR there are licensing requirements, but the costs (although in CA, not the PITA factor for CPE it seems; although they require mcuh less than I need). So I view this as a leveling out. Some of this stuff is why CPAs and EAs really have to charge more; it's just damn more expensive keeping up with education and licensing. So put on your big girl & boy panties and suck it up. IMHO it's been a travesty that for the most part tax preparers have been under less oversight than the barbers we joke about giving tax advice.

That is pretty wide brush you are painting strokes with....

Do you have your car(s) repaired only by a Dealership Certified Master mechanic? Unless you answer yes, you have no basis for making your statements about EA's and CPA's as if they are the only ones who study, learn, train and are knowledgable enough to properly prepare a tax return.

All the IRS latest "licensing" actions will NOT stop those who don't care from hafl-a _ _ doing tax returns and not signing them. It is an effort in futility.

For the record, I was ASE and 3 car manufacturers Certified Master Auto Technician for 27 years before changing careers. The "BIG THREE" auto companies all honored the same certifications, and I had to retest and re-certify every 5 years. Do CPA's and EA's have that retesting to re-certify? The IRS by any business standards is poorly run, administered and operated.

Also, if you take your car to an independent shop, it is no different than an unlicensed preparer doing tax returns.

For the record, I am scheduled to re-take, and I WILL pass the third EA exam at the end of this month.

[joanmcq]

No, Jack, I don't take my car to the dealer for repairs, but I do take it to an ASE certified mechanic.

Under the new rules, once you pass the test, you do not have to retake it. I passed the CPA exam 11 years ago; I don't have to retake it. EAs don't have to retake the exam. That's not a relevant arguement.

I know there are a whole lot of previously unlicensed preparers that are diligent in their education and take this profession seriously. There are others that are not. I'm tired of the bitching and moaning from y'all that will have to step up; I paid a hell of a lot of fees and a lot for education when I had 50 clients and those same fees and costs when I had 30, and I still pay those fees now that I've broken the 100 client level. So, since we have already established that I paid more fees than the unlicensed preparers at 50 clients (and stayed in business, and had a profit, and enough of a profit that I did not want to leave the profession or stop working my own clients), why do you say that anyone with 50 clients will drop out? Either they raise their prices to cover the fees, or they don't and take less profit. Or they stop preparing taxes. The main part of the fees are a one time thing, fingerprints, testing, etc. The CPE requirement is something that any professional should have been doing all along. The PTIN is $62.50 a year. At least the EAs got a reduction of the EA fee, I didn't. I'm just tired of the bitching about what is not a big deal IMHO.

Yes, nothing will stop the person who buys a copy of TurboTax and doesn't sign the returns. But the laws do put teeth into the prosecution of such people. And data mining will help the IRS find them and shut them down.

[Jack from Ohio]

No, Jack, I don't take my car to the dealer for repairs, but I do take it to an ASE certified mechanic.

Under the new rules, once you pass the test, you do not have to retake it. I passed the CPA exam 11 years ago; I don't have to retake it. EAs don't have to retake the exam. That's not a relevant arguement.

I know there are a whole lot of previously unlicensed preparers that are diligent in their education and take this profession seriously. There are others that are not. I'm tired of the bitching and moaning from y'all that will have to step up; I paid a hell of a lot of fees and a lot for education when I had 50 clients and those same fees and costs when I had 30, and I still pay those fees now that I've broken the 100 client level. So, since we have already established that I paid more fees than the unlicensed preparers at 50 clients (and stayed in business, and had a profit, and enough of a profit that I did not want to leave the profession or stop working my own clients), why do you say that anyone with 50 clients will drop out? Either they raise their prices to cover the fees, or they don't and take less profit. Or they stop preparing taxes. The main part of the fees are a one time thing, fingerprints, testing, etc. The CPE requirement is something that any professional should have been doing all along. The PTIN is $62.50 a year. At least the EAs got a reduction of the EA fee, I didn't. I'm just tired of the bitching about what is not a big deal IMHO.

Yes, nothing will stop the person who buys a copy of TurboTax and doesn't sign the returns. But the laws do put teeth into the prosecution of such people. And data mining will help the IRS find them and shut them down.

Just to be clear, my point of contention is having to pay for something to be done for the IRS, that I have already done for the IRS. My fingerprints have not changed, and a background check can be performed with the information they already have. It would be like the shop manager at your repair facility saying that you must pay a second time for tires (in order to keep your warranty in place) because their company cannot find the purchase information when you originally bought them.

The annual renewal fees, etc are just additional business expenses. Again, none of these recent actions by the IRS will accomplish their stated goals.

I have 160 personal clients even before mandatory testing and before I started the trek to get my EA. I am only pusuing my EA to circumvent the senseless and probably useless testing the IRS is hawking in order to keep my PTIN. My business was built on integrity, knowledge (I make my share of mistakes too) and the willingness to be up to date, continuing to be educated on the latest changes,(I have 3 times the number of CPE credits needed for an EA, and I am not even an EA) and informed. Most of the general public have no idea of what an EA is, they think that CPA is the holy grail of accounting, yet I could fill a book with all the instances of a "CPA" not knowing tax law correctly that I have corrected. Do you really think the new title given to those that pass the, as yet to be seen, tests, will mean anything to the public at large?

Yes, nothing will stop the person who buys a copy of TurboTax and doesn't sign the returns. But the laws do put teeth into the prosecution of such people. And data mining will help the IRS find them and shut them down.

You can believe that if you wish. Real world experience tells me that it is highly unlikely that any of those operations will ever be found, fined, shut down or even have their wrist slapped. The IRS cannot yet match all the documentation they currently require. There are so many examples of the incapability of the IRS to currently handle what is on the books.

BTW, Pacun was the one that suggested the 50 or less client preparers will be forced out of business.

[joanmcq]

My point is though you may be getting more than the required CPE and going far above and beyond what the average unlicensed preparer does, many do not, and these are the people I am competing with for fees, as well as you. Even if many people do not recognize what an EA is or what the title encompasses, it does give you the ability to represent your clients in audit, to get a POA, and therefore expand your practice into areas you formerly could not.

And even EA's don't know everything. Can you spot all the mistakes in this article? http://www.foxbusiness.com/personal-finance/2011/06/30/tax-tips-for-sub-s-corporate-structures/

written by an EA who shouldn't be allowed near a typewriter, much less being published.

Now I'm not sure in which forum I read it, but software does code where an efile comes from. Now this won't stop unresgistered preparers from doing paper copies on TurboTax, but the efiles can be tracked. Kinda big brotherish, but hey, I'm above board, and I don't care if the IRS knows how many returns I prepare. They do already.

I apologize for appearing to only reply to your post rather than to both yours and Pacun's. I'm not good with quoting posts.

[Pacun]

Joan,

I started to read the article and I stopped really soon because it is garbage.

I agree Jack that what the IRS is doing will not stop unregistered preparers, but for sure will put an extra economic burden on us. I became EA On June 7th 2011. That event cost me more than $1,000 without considering opportunity cost. I had to pay for conference to review the EA exams, other materials, $100+ for each exam, $30 for the IRS, $64+ for the PTIN, etc). Now I have to pay for another conference to get my CPE credits for this year.

To be honest with you, I learn more here in this forum than on any conference I attend, but that's another subject.

Going back that unregistered preparers will not stop... let me tell you what they are doing. They buy Turbo tax and they print the returns and give copy to the client. Then they go to www.irs.gov and file for their client. They create an account for them and enter all the information. To eyes of the clients, they are legit because they were able to efile for them, right?

This tax season, I had a lady who went to one of these places. They told her that they were having difficulties efiling but they were going to try again. They kept trying and the lady got desperate because she needed the 8K she was expecting from the IRS.

She came to my office and I interviewed her. She doesn't speak any English, she doesn't go to school, her children are 8, 9, 11 and yet she was claiming the American Opportunity credit". I explained to her that she didn't qualify for the credit and that her 8K was going to be reduced to $6,700. She was happy that I spotted the mistake and asked me to file for her. I asked her to go to the other place and ask them to stop any attempt to file for her. She did and I efiled. There was an issue with the names on one of the SS card of the dependents but the next day, my efile was approved (this was the issue the other preparer was having and couldn’t solve). She got her money. A couple of months later, she got a check for $1,300. I asked her to call the IRS and return it because the second return (which was eventually mailed by the other preparer) was incorrect. She called the IRS stating that the second return was a mistake and she wanted to return the refund. The IRS told her... it is your money because we received your second return and since it is within the filing season we take this second 1040 as an amended return. Everything is OK, cash the check and don't worry because everything is OK.

I couldn't represent her on the second claim because I didn't prepare the return and I was not an EA.

My point is... the IRS has provided the tools for these preparers...they go to www.irs.gov and file as the filer and there is nothing they can do about it. With the new technologies, the IRS should call the tax payers who file more than 3 returns from the same computer, especially if they have different mailing addresses, don't you think?

Also, have you wondered why the IRS has run out of ITIN numbers from 9XX-7X-XXXX and 9XX-8X-XXXX? The IRS didn’t anticipate that many requests… do you know why? That is because people are applying for ITIN for dependents in countries beyond Canada, USA, and Mexico. How can the IRS solve this problem? Force everyone to use the services of an Acceptance Agent if they need an ITIN. I always ask the child to sign or at least I see them in the office when applying for ITINs.

[Edward]

Pacun: You should go to FACEBOOK and present these comments to David Williams. He is in charge of all this and I'm certain he would want to know about what you said. In March I had a client that came to me and he had been seeing a lady that used TT on his tax returns, and of course in the preparers signature element it had "SELF PREPARED". Anyway, the guy did some business travel and you wouldn't believe how she handled it. One year she would give him the mileage and the next she would switch MACRS, then the next year back to mileage of course disregarding the limitations when you do the switching of such modes. When I asked the guy if he had any mileage logs, he stated negative and that they would just give an estimate which was way out of shape. Many of the other expenses were way off so I just told him I wasen't going to work with the return and told him to go elsewhere. These unregistered types are creating a real disaster for the tax preparation industry and I doubt whether they will ever catch them.

[Pacun]

These unregistered types are creating a real disaster for the tax preparation industry and I doubt whether they will ever catch them.

I guesss your facebook contact is useless if you are making this comment.

[Jack from Ohio]

This article in the Kiplinger Tax Letter just make my point(s):

Preparers who pass IRS’ competency test can prepare all types of returns, the Service says. Although the upcoming test will cover only the 1040 seriesof returns and their schedules, folks who pass the exam won’t be restricted to 1040s. They’ll be allowed to prepare other types of returns, such as Form 1120. In the future,the agency will expand testing beyond the 1040 and limit preparation of those returnsto people who pass the exams. But that won’t occur for several years. And remember, unlicensed preparers will have until the end of 2013 to pass the 1040 examination. In the interim, they can prepare any type of return if they have registered with IRS.

The continuing education rule for unlicensed preparers will start in 2012, the IRS now says. They will have to complete 15 hours a year...at least 10 of them on federal tax law topics, three hours on federal tax law updates and two on ethics. Courses will be offered by providers approved by the IRS. None have been OK’d yet. Credit hours from courses already taken this year won’t count toward the 15 hours. Remember that lawyers, CPAs and enrolled agents are exempt from the 15-hour rule, although they still may need continuing education to keep their professional licenses. Also exempt from IRS’ continuing education rules: Those who don’t prepare returns in the 1040 series and supervised preparers who do not sign any tax returns.

The Service will not let preparers take their fees from taxpayer refunds after all. Last year, IRS officials said that the agency was considering a proposal to allow e-filers to use a portion of their refunds to pay their tax preparation fees. This way, they wouldn’t pay anything up front. IRS has now changed its mind.

Preparers will start renewing their special tax ID numbers in October for 2012, the IRS says. The agency has decided to switch to a calendar year cycle for renewals. Last year, the fee was set at $64.25 to cover the setup expenses of the registration system. The charge for 2012 is expected to be significantly less. (HA HA!)

[jainen]

>>it is highly unlikely that any of those operations will ever be found<<

The IRS announced today they have found and are taking action against 100,000 of them!

[Jack from Ohio]

>>it is highly unlikely that any of those operations will ever be found<<

The IRS announced today they have found and are taking action against 100,000 of them!

Post the link??

[Lion EA]

http://www.irs.gov/newsroom/article/...241931,00.html

[OldJack]

Not to fret, the IRS income tax department will be history in a few years. IRS employees will not be able to pass the test.

[Jack from Ohio]

More pie in the sky rhetoric....

In an effort to identify these "ghost preparers," the IRS later this year also will send letters to taxpayers who appear to have had assistance with their returns but lack tax return preparer signatures. The letter will inform taxpayers how to file a complaint against preparers who failed to sign returns and explain how to choose legitimate tax preparers. The goal of the letters is to protect taxpayers by ensuring that all paid federal tax return preparers are registered with the IRS, and sign tax returns they prepare and use an identifying number when required to do so.

Compliance is a central part of the new tax return preparer initiative and the letters are one step in an ongoing compliance effort to ensure tax return preparers are following the new regulations. The IRS also is working to identify tax return preparers who make repeated errors and IRS personnel have had face-to-face meetings with thousands of these tax return preparers over the past two years.

"...taxpayers who appear to have had assistance with their returns but lack tax return preparer signatures"

I wonder if this group includes all those done by "Do It Yourself" software programs?

[Lloyd Hudson]

Post the link??

Mu daughter got a letter from IRS regarding her PTIN that she got years ago. She did one return lastt year for a friend and dutifully signed it. She now has to register for the new PTIN, payt the $64.00 (retroactivivly ) for 2011 and also renew PTIN for 2012 and pay the $64.00. I believe that is where the 100,000 number came from.