IRS Offers Voluntary Certification of Return Preparers

By Alistair M. Nevius, J.D.

From the IRS

Following the defeat in federal court of its mandatory tax return preparer regulation program, the IRS in late June introduced a voluntary program of tax return preparer certification.

Under Rev. Proc. 2014-42, tax return preparers who wish to participate in the program would:

  1. Hold a valid preparer tax identification number (PTIN);
  2. Complete 18 hours of continuing education from an IRS-approved provider;
  3. Have limited rights to represent taxpayers before the IRS concerning returns they prepared;
  4. Be included in a database of return preparers who were in the program;
  5. Consent to abide by the duties and responsibilities under subpart B of Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10);
  6. Receive an IRS-issued Record of Completion, documenting their par ticipation in the program.

The 18 hours of continuing education that program participants must complete will include a six-hour refresher course for tax season, 10 hours of federal tax law topics, and two hours of ethics. The program will be in place for the 2015 filing season, but it will have a phased-in requirement of 11 hours of continuing education that must be completed in 2014.

Return preparers who passed the IRS's previous return preparer registration program examination or who are licensed by or registered with a state or other recognized entity after passing an examination that covers federal tax will be exempt from taking the six-hour tax season refresher course. The IRS will post a list of states and entities that offer examinations that qualify for purposes of this exception.

Preparers who elect to participate will be listed in a directory on the IRS website beginning in January 2015. The database will also include practitioners with recognized credentials and higher qualifications, such as enrolled agents, attorneys, CPAs, enrolled retirement plan agents, and enrolled actuaries. The directory will not include tax preparers with preparer tax identification numbers who are not members of any of the above-listed groups of preparers.

Only tax return preparers who hav e a record of participating in the program for that tax year will be able to represent their clients before the IRS during an examination of a return that they signed or prepared. (CPAs, attorneys, and enrolled agents continue to have unlimited representation rights.)

Tax return preparers who register for the program and receive a Record of Completion will not be allowed to use the terms "certified," "enrolled," or "licensed" to describe their status, nor may they make representations that they are endorsed by the IRS. They may represent that they hold a valid Annual Filing Season Program Record of Completion for that calendar year and that they have complied with the IRS's requirements for receiving a Record of Completion.

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