Posted 9/22/11

IRS ISSUES FURTHER GUIDANCE ON PREPARER TESTING FEES, EDUCATION REQUIREMENTS, AND FINGERPRINTING

The IRS has released a Notice and new regulations that provide further rules for tax return preparers, including testing fees, PTIN timetables, and continuing education requirements. The IRS portion of the test fee will be $27 and the IRS portion of the fingerprinting fee will be $33. These amounts are in addition to what the vendor will charge, which has not been disclosed at this point. The total fees are expected to be between $60 and $90 for fingerprinting and $100 and $125 for testing.

Provisional PTINs and Renewal

PTINs must be renewed on a calendar year basis, between October 15th and January 1st annually. This can be done online or by filing paper Form W-12. The fee is $64.25 for 2012. The IRS will continue to issue provisional PTINs at least until April 18, 2012 to allow individuals sufficient time to prepare for the competency examination and to prevent disruption of the 2012 filing season. The IRS will announce the last date it will issue provisional PTINs in a news release issued at least 30 days before that date. Once the IRS stops issuing provisional PTINs, return preparers will have to pass the competency test and background check before getting a PTIN. If a preparer gets a provisional PTIN before the last provisional PTIN date, the preparer will have until the end of 2013 to pass the competency test.

Preparers who have a provisional PTIN through December 31, 2013 must annually renew and continually maintain the provisional PTIN to retain the ability to prepare tax returns during this period. If a preparer lets his or her provisional PTIN expire, the preparer must take the competency test and pass a suitability check before getting another PTIN.

Continuing Education and Fingerprinting

The 15-hour continuing education requirement will take effect starting in 2012 and will apply on a calendar-year basis. Fully credentialed Registered Tax Return Preparers and provisional PTIN holders--those individuals required to pass the competency examination before December 31, 2013-- must complete the 15-hour requirement to maintain their PTINs. The IRS also has explained how to prorate continuing education requirements for preparers who first get PTINs after January 31 of a calendar year. These individuals will be required to complete one hour of continuing education credit for each month or portion of a month that the individual is a registered tax return preparer during the initial registration year. These individual still must do at least two hours of ethics education regardless of when they become registered preparers.

Return preparers who must pass a background check will have to provide their fingerprints for an FBI database search, with a few exceptions. The fingerprint requirement will affect those preparers who currently have provisional PTINs and those applying for a PTIN after the provisional period. However, attorneys, CPAs, enrolled agents, enrolled retirement plan agents, and enrolled actuaries are exempt from the fingerprint requirement. Also, any participant in the PTIN, acceptance agent, or authorized e-file provider programs who resides and is employed outside of the United States will not have to be fingerprinted to participate in these programs. Fingerprinting will not begin until at least April 18, 2012.

Hearing and Comments on Fee Regulations

The IRS has scheduled a public hearing on the proposed fee regulations on October 7th. Written comments can be submitted until October 27, 2011. More information on submitting regulation comments is contained in the full-text of the regulations, posted on the NSTP website.

Notice 2011-80 »

Proposed Regulation No. REG-116284-11 »