IRS EXPLAINS RESTRICTIONS ON THE USE OF THE TERM 'REGISTERED TAX RETURN PREPARER'

Final Circular 230 Regulations Issued

The IRS has issued a Notice restricting the use of the term "Registered Tax Return Preparer" by tax professionals during the time of provisional PTINs. The IRS also issued final Circular 230 regulations relating to the disciplinary rules for tax return preparers and other tax professionals admitted to practice before the IRS.

Requirements for Registered Preparers

To become a registered tax return preparer, an applicant must pass a competency examination as well as tax compliance and suitability checks. The IRS has selected Prometric, Inc., to develop and administer the competency examination, but the examination is not yet available. The IRS also is still working on the process of developing the suitability check.

Restrictions on Use of Term

Because the conditions for becoming a registered tax return preparer cannot be satisfied yet under the provisional PTIN process, the IRS has mandated that no individual may represent that he or she is a registered tax return preparer at this time. An individual with a provisional PTIN may not represent that he or she is a registered tax return preparer or has passed the competency examination. Once the competency examination is available, only an individual who has met all of the conditions, including passing the competency examination and the tax compliance and suitability checks, may represent that he or she is a registered tax return preparer.

IRS Required Language in Preparer Advertisements

An individual who becomes a registered tax return preparer must comply with the advertising and solicitation rules in Circular 230, which will require that a registered tax return preparer using any paid advertising involving print, television or radio must display or broadcast the following statement:

"The IRS does not endorse any particular individual tax return preparer. For more information on tax return preparers go to IRS.gov."

Final Circular 230 Regulations

The IRS also has finalized the Circular 230 regulations covering tax return preparers. We are analyzing the final regulations and will provide you with an explanation of the final rules soon. Watch your e-mail and the NSTP website for further information.