If you are an EA or a CPA, you will not be subject to the PTIN testing in 2012. Otherwise, if you preparing tax returns for a fee, then you’ll need to pass the PTIN test in 2012. To oversee the administration of the PTIN process, preparer regulation, education and testing, and preparer discipline, the IRS has created the Return Preparers ‘ Office.

Next, the IRS will issue the new Registered Tax Preparer competency test. People who get a temporary PTIN before the competency exam, may prepare any tax return or claim for refund until December 31, 2013, so long as the individual renews their PTIN, Afterward, you must complete 15 hours of continuous education each year in order to maintain the Registered Tax Preparer designation. After that only lawyers, CPA’s, EA’s, and RTRPs may acquire a PTIN. At this time, only individuals supervised by a lawyer, CPA or EA are able to use the PTIN of their supervisor and aren’t required to get their own PTIN. IRS Commissioner Doug Shulman expounded, “This is another big step forward in our effort to improve tax preparation service to millions of taxpayers. People should feel assured the person they hire to prepare their federal tax returns has a working knowledge of the tax code. Lots of tax return preparers are reputable professionals but the few bad apples cause great harm to taxpayers and the industry.”

Remember, that tax return preparers could have to deal with penalties if they prepare, or help in the preparation of, all or significantly all of a tax return or claim for refund and don’t have a PTIN. Failing to go along with the PTIN rules might end up in the imposition of Code Sec. 6695 penalties, injunction, referral for criminal investigation, or disciplinary action by IRS’s Office of Professional Responsibility.

Remember, e-filing begins January 18. So get your PTIN now.

We here at UserUnite have reviewed several products that incorporate a PTIN module that interfaces with the IRS site . The best we have seen for the mid-market is Drake Software . Again, it is free if you go to the IRS website.

Written by David Bishop, CPA, Industry Director - Accounting & Tax for UsersUnite.com. David writes ablog that discusses the news and topics related to software in the public accounting and tax preparation industries. If you have got a subject that youwould like to see David write about please send him an e-mail with the details at david.bishopusersunite.com.

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