IRS announce licensing of Tax Preparers

The IRS has released their recommendations for registering paid preparers. I have taken pertinant portions of their news release and it is shown in black. My comments are shown in red.

IRS has been working on deciding how to license tax preparers for the past several years and finally has passed it.

The IRS will require all individuals who are required to sign a federal income tax return as a paid preparer to register and obtain a preparer identification number (PTIN). Many individuals receive pay for completing tax returns, but do not sign them. This is illegal, IRS has always required paid tax preparers to sign the tax return. YOU will be pleased to know that ALL of our preparers have been registered with IRS and have had a PTIN for many years.

Competency testing will be required for all paid preparers who are not enrolled agents, CPAs, or attorneys. You will be pleased to know that I tested and passed the Enrolled Agent test in 1996 and have been certified as an Enrolled Agent since that date.

There will be no grandfathering of any kind based on years of experience.

In addition, the IRS will require 15 hours of annual continuing professional education consisting of three hours of federal tax updates, two hours of ethics, and ten hours of general federal taxation. EACH of my Tax Professional Preparers and I complete at least 72 hours of upgrade education training EVERY year!

The IRS plans to implement the registration requirements in 2011. These regulations do not affect the 2010 filing season. This is a great benefit to the American taxpayer. There are many unscrupulous preparers out there right now that do not keep up with tax law and prepare many fraudulent returns. We have gained quite a few new clients over the years, who got into trouble with preparers in the Valley, who took many illegal deductions. Sad to say, these clients learned the hard way, when they received an audit, and many of them ended up owing IRS and the State of Az. sizable amounts.

I just thought you would be interested to know that Sherwood's Quality Tax and Accounting has always put the education of our preparers at the top of our priorities. A large portion of our budget goes to training and a large portion of our preparer's off season time goes into studying and attending upgrade education seminars.

WE CARE ABOUT YOU, and strive to give you the VERY BEST tax preparation and planning possible.

Sincerely, Deborah Sherwood, EA

The full text of the report is available here - http://www.irs.gov/pub/irs-utl/54419l09.pdf