Taxation Law

Taxation Law

Section Blog

PTINs...What are they? (1)

by Caitlin M Cianflone , posted Mon, Mar 7, 2011 2:44 PM

Starting this year all paid tax return preparers are required by the IRS to obtain a Preparer Tax Identification Number (PTIN), so that the IRS can begin to implement its plan to regulate the tax preparation industry. Currently, there are no requirements for being a paid tax return preparer. A lawyer, CPA, enrolled agent, or average Joe is free to prepare tax returns and charge any fee that the customer will pay, regardless of training, skill, or oversight.

In 2009, the Treasury Inspector General for Tax Administration (TIGTA) conducted a study and found that an estimated 73 percent of the over 1 million tax return preparers were unregulated. To address the alarms that sounded after TIGTA released this information, the IRS began by requiring all tax return preparers to obtain PTINs.

The long-term plan being implemented by the IRS includes an intention to require paid tax preparers to take continuing education classes and pass exams to ensure that they are truly qualified to prepare returns. These requirements will not apply to attorneys, CPAs, or enrolled agents, but they will apply to all other paid tax return preparers.

As of right now, the IRS admits that there is no distinction in the issued PTINs between practitioners and registered preparers. Like most government programs, this plan will take a few years, at least until 2014, to become fully functional.

The ultimate goal of this program is to ensure some uniformity in the tax preparation industry. Hopefully, this plan will protect taxpayers from paying for subpar service and easily avoidable mistakes. 

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