NSTP is excited to announce the release of our new website. Members will discover a new look and feel, improved navigation with quick and easy access to a wide range of information.
Our new website reflects the future of our profession--with a staff dedicated to providing you with an up-to-date reliable source of information.
As a member, you will discover the difference right away.
Welcome and enjoy!
Greta Barncord, EA
NSTP Board President
Posted 1/3/12
NSTP announces the 2012 Registered Tax Return Preparer (RTRP) Exam Preparation Course Locations. Additional details coming soon.
Posted 11/22/11
The IRS has launched the return preparer competency test with test scheduling to begin the week of November 28th . The fee for the competency test is $116, which includes the IRS portion of the fee and the fee for Prometric Inc., the third-party test vendor. Initial test takers will not receive their test scores for two to six weeks to allow the IRS to validate the exam and determine the pass/fail cutoff. Once validation is complete, around mid-January, those taking the computer-based test will receive their scores at the test center immediately upon completing the test.
Prometric will eventually administer the test at more than 260 centers nationally, but the test is not available at all locations currently. Test sites will be added daily, and international locations may be added in the future.
Preparers who need to take the test can schedule an appointment beginning next week through their online PTIN account at www.irs.gov/ptin. Preparers must pay the $116 test fee at the time they are scheduling their appointment. Those who do not have an online PTIN account can make test appointments and pay by phone at 855-477-3926.
Click here for the IRS News Release on the exam.
Click here for an IRS Fact Sheet on the exam.
The IRS also has finalized rules for imposing a fee for the return preparer competency examination. Proposed regulations were issued on September 26, 2011 establishing the IRS's portion of the user fees for the competency examination and fingerprinting. Since that time, the IRS has backed off on its fingerprinting requirement, so no fingerprinting fee is included in the final regulations. The IRS will continue to study the fingerprinting issue and is still interested in getting comments from tax preparers on this issue.
The final regulations only finalize the user fee to take the competency examination. The fee is set at $27 each time an applicant takes the exam. The IRS said the cost is the same to the IRS and the vendor each time the exam is taken, so the same user fee will apply for each attempt. This is the IRS portion only. Prometric, the IRS testing vendor, is charging the balance of the fee. The total fee will be $116.
Despite requests to the contrary, the IRS will not exempt certain employees from taking the competency examination if they already have to take their employer's exam. Presumably, this decision relates to employees of the big tax preparation firms.
The remaining portions of the proposed regulations were adopted without substantive change.
Click here for the Final Regulations.
Posted 11/21/11
President Obama has signed into law H.R. 674, the bill to repeal the 3% withholding on government contractors.
The measure also includes two tax credits for hiring veterans. The Returning Heroes Credit would give employers $2,400 for hiring post 9/11 veterans who have been out of work for four weeks and $5,600 for veterans who have been out of work for six months or more. The Wounded Warriors tax credit would give employers who hire a disabled veteran $4,800 for veterans who have been unemployed for four weeks and $9,600 for veterans who have been out of work for six months or more.
Posted 10/24/11
President Obama has signed into law a trade bill which increases the penalty on preparers who do not exercise "due diligence" when determining eligibility for and the amount of a client's earned income tax credit (EITC). The measure, Public Law 112-41, the United States-Korea Free Trade Agreement Implementation Act, increases the penalty from $100 to $500 for each failure. The increase applies to returns that must be filed after 2011.
On October 6, the IRS issued proposed regulations spelling out the EITC due diligence requirements, including filling out the Form 8867 checklist, sending the checklist in with returns, and maintaining the checklists in the client files. See the "IRS News & Information" section of the NSTP website for an article on the proposed regulations.
Observations: As one of our Board members commented, preparers may be facing a $500 penalty for answering just one of the Form 8867 questions incorrectly. With questions such as--" Could the taxpayer, or the taxpayer's spouse if filing jointly, be a qualifying child of another person for the year on line 1?" and "Did the child live with the taxpayer in the United States for over half of the year?"–a heavy burden is being placed on tax preparers to personally investigate the family circumstances of the taxpayer. Where does this duty to investigate the taxpayer end? The IRS makes the following statement in Question 22 of the Form regarding a tax preparer's duties:
"To comply with the knowledge requirements, you must not know or have reason to know that any information used to determine the taxpayer's eligibility for, and the amount of, the EIC is incorrect. You may not ignore the implications of information furnished to or known by you, and you must make reasonable inquiries if the information furnished appears to be incorrect, inconsistent, or incomplete. At the time you make these inquiries, you must document in your files the inquiries you made and the responses you received."
It remains to be seen how stringently the IRS will enforce these Draconian rules against preparers. This provision was included as a tax offset to help pay for the trade bill, so there is a revenue number associated with the penalty increase. In short, the government plans to bring in money with this increased penalty provision.
The IRS has posted on its website the new version of Circular 230, the rules of practice before the IRS. The revised version, Circular 230 (Rev. 8-2011) incorporates changes made by recent regulations including the new rules applicable to registered tax return preparers. Use the link below to access the revised publication.
Representatives from the IRS Return Preparer Office told participants at a recent SB/SE National Practitioner Forum that competency testing will not be available until October 2011. The IRS originally said testing would begin in September. They also said that the test results will be immediately available, before the test-taker leaves the testing facility. Preparers with existing PTINs will have until December 31, 2013 to pass the test.
The second release of the upgraded PTIN system will occur sometime after September 2011. The IRS changed the renewal cycle for all PTINs to a calendar-year renewal. Open season for 2012 PTIN renewal will begin in October 2011.
Dear Members:
Since the January 5, 2010 announcement by the Internal Revenue Service that all return preparers will be required to register with the IRS in order to continue to prepare tax returns, NSTP has provided you with all the details as we have received them.
In the January 5 announcement the IRS also mandated that each tax preparer will be required to pass an exam during an initial three year testing period. At this point in time, no specific details have been released as to the exact time when the exam will be ready for tax preparers to actually sit for the exam. There have been some news releases which state that the exam will be available in May or June of 2011, while other articles state June or July 2011. Other tax associations have made announcements which would lead one to think and believe that you have to take a preparation course immediately. One even asked if you were "scared" about the test! But in reality, at this moment no specific date is available and the IRS has only recently made an announcement looking for vendors to write the exam. In addition, although a general description of the exam has been given, the exact details of "what" will be tested have not been released. The only information that the IRS has released is that one exam will cover wage and non-business income and EIC, while the other will cover Form 1040 wage and small business income. David Williams, the IRS Executive Lead for implementation of the tax preparer registration and testing initiative states that the exams will test competency and will be open book, but does not explain what is meant by open book.
NSTP is focusing on the issue that an exam will be required to be taken and passed to continue in the field of tax preparation. To ease any concerns you may have about this new requirement and give you confidence going into this exam NSTP is preparing educational materials that will be available to assist you in your preparation and successful completion of this exam. So the bottom line is that you can relax because NSTP's materials are going to help get you ready to pass the test.
The best part of it is that you will be able to choose how you would prefer to study. Whether its is by printed materials used in your home or office, on the internet while sitting at the pool or a live session with NSTP's knowledgeable instructors, you will be ready to sit for and pass any exam that the IRS commissions to be created. With the combination of your years of professional experience in preparing your clients income tax returns and providing them counsel and NSTP's educational materials you will be equipped to pass the exam!
You can rely on NSTP to keep you updated on the IRS examination and any issues that arise along the way. Soon, NSTP will be releasing detailed information about each of the programs that we will be offering.
NSTP appreciates the trust and confidence of our members and will continue to provide guidance and the highest quality education and materials possible as we look forward to the future and the changes and opportunities it brings to our profession.
Sincerely,
Paul LaMonaca
Director of Education