Unlicensed Tax Preparer-Last Yr. to File?

[zeros]

If a tax preparer chooses not to take the test and be licensed, what would be the last year he could prepare returns? Could he prepare 2012 returns?

[PIGLEE]

I copied this from the IRS site.

The way I read it is that you have to pass the exam by the end of 2013, so it looks like you could file the 2012 returns in 2013. Don't wait till the last minute, if you have been preparing tax returns it should not be that hard to pass. NATP and others will have study material to help you be prepared.

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Phase 2: Pass IRS Competency Exam (begins mid-2011)
In mid-2011, the second phase of the paid preparer oversight program is scheduled to begin. You must pass an exam to demonstrate your competency to prepare federal tax returns. Once you pass the exam, you will become an IRS Registered Tax Return Preparer.

Exception—if you are an attorney, CPA or Enrolled Agent (and are active and in good standing with your licensing agency) you are exempt from the test requirement.

We expect to have the exam available in mid-2011. If you register and get your new PTIN before the competency exam is available, you will have until the end of 2013 to take and pass the exam. If you delay getting your PTIN until after the online exam is available, you will have to pass the exam before you can get your PTIN and start preparing federal tax returns.

[spanel]

and unless you register your PTIN, you will be unable to prepare returns in 2011.

Chris

[JohnH]

Unless you prepare less than 100 returns in 2011...

[Bees Knees]

Unless you prepare less than 100 returns in 2011...

The 100 return rule applies to the e-file mandate. The PTIN requirement is for every paid tax preparer, regardless of how many or how few returns are preparered.

[JohnH]

OK, thanks for that clarification Bees.
I was wrong.

Guess I'll have to re-up even though I've had my present PTIN since they were first introduced.
Gotta remember to do that on Dec 31. (I'll be sure to turn off the lights on my way out)

[WhiteOleander]

Has anyone seen the penalty for not signing up and still doing returns? I've already registered so I was just wondering. I figure there will be alot of do-it-yourselfers that either won't care or won't know because they don't keep up with things.

[spanel]

From what i've heard, if you do a few.. probably nothing will happen.. assuming they dont IRS reject the return if efiled. If you do more than that, expect an IRS agent to visit.

I believe in the webiner the irs had back in the summer, they mentioned they will NOT reject returns without PTINs, but would make a visit.. in future years, they will will reject with no PTINs or non matching info.

Chris

[Bees Knees]

Has anyone seen the penalty for not signing up and still doing returns?

The Social Security number of the preparer is no longer accepted starting with the 2010 return. Thus, the PTIN is the only number that can be entered on the tax return under the paid preparer section.

According to TTB, page 15-2, the penalty for failure to furnish the identifying number of the preparer on the return is $50 per return, to a maximum of $25,000 per year.

[taxxcpa]

Unregistered preparers

In the future, unregistered preparers will just prepare the return and let the client mail them in as if they were self-prepared.

[dtlee]

In the future, unregistered preparers will just prepare the return and let the client mail them in as if they were self-prepared.

Perhaps you have come up with another reason why self-prepared returns go to a different address. If a non-signer is using tax preparation software, the filing instructions will tell the non-client to mail the return to the "used a preparer" address. (I know...wishful thinking on my part.)

[Bees Knees]

In the future, unregistered preparers will just prepare the return and let the client mail them in as if they were self-prepared.

And when the IRS asks why something was done a certain way on the return, the client will say because their accountant did it that way...

Now, on top of the $50 penalty for not providing a preparer ID number on the return, there is another $50 penalty for not signing the return.

[taxea]

In the future, unregistered preparers will just prepare the return and let the client mail them in as if they were self-prepared.

If they get paid for doing the return and don't sign it they are in violation of the law and probably subject to the same 50. per return penalty

[dtlee]

If they get paid for doing the return and don't sign it they are in violation of the law and probably subject to the same 50. per return penalty

That will definitely put a stop to this practice.

[veritas]

A fifty dollar fine

won't slow down those that want to beat the system. That's hardly more than a parking fine

Oregon couldn't stop unlicensed preparers until they got the penalties increased and the power to go after the offenders.