Transcript Return Preparer Oversight and Circular 230 Update

Return Preparer Oversight and
Circular 230 Update
IRS Office of Return Preparer
Oversight
• Who's manning the Office?
• What do they do?
• What about OPR?
Who's Manning the Office?
• Director - David R. Williams
• Deputy Director - Preston Benoit
• Enrolled Agent Liason/Overseer - ???
What do They Do?
• Responsible for RTRP program
– PTIN's
– Testing
– Background and Compliance checks
– CPE compliance
• Legacy 230 Preparers
– PTIN's
– ???
What About OPR?
• Circular 230 compliance and complaints practitioner conduct
• Disciplinary actions and hearing process
for protests/appeals
• What's not part of RPO
A PTIN, a PTIN, Wherefore art
thou PTIN?
• 800,000 - 1.2 Million Paid Preparers
Estimated
• About 717,000 PTIN's have been issued
• Short issuing 1,000's of PTIN's but not
100,000's
• PTIN's are Valid thru Calendar Year End
• All Form 1040 Tax Return Preparers must
renew annually
A Test Upon Both Your Houses
• RTRP will have their own test
• No test for Business Returns - 1065 and
1120
• NAEA still pushing for second test
The RTRP Test
• Will be a new test, not Part I of the SEE
• Will be for minimum competency
– Explain Why AMT was calculated
– Public was asked for input on test
• Will be available starting this fall, perhaps
October
• Must be passed by Dec. 31, 2013 to sign
returns
No Business Returns Test
• Over 90 percent of all tax returns are form
1040's
• Oversight happening in stages
• Currently no data suggests a problem with
Business Returns
NAEA is not Satisfied
• NAEA is promoting a 2 tier approach for
RTRP's
• Still thinks testing should take place for
Business Returns
Other RTRP Information and
Requirements
• Must pass compliance and background
checks, including fingerprinting, starting
approximately October, 2011
• Must take 15 hours of CPE annually
consisting of
– 3 hours of federal tax updates
– 2 hours of ethics
– 10 hours of federal tax law (preparer's
discretion)
More RTRP Info
• Non-signers working for and supervised by
a Legacy 230 preparer will not be subject
to passing the test or annual CPE
requirements
• Must Comply with Circular 230
Other IRS Information
• IRS will use PTIN's to help them develop a
searchable database of return preparers
for public use
– Public will be able to see credentials of return
preparers
• IRS will support EA branding as highly
qualified tax professionals
– Stated it is committed to promoting the
designation of enrolled agent
More IRS Info
• IRS would like eventually to use PTIN to
have CPE reported to RPO office in "real
time"
• IRS would like to get to real time reporting
of W-2 and 1099 information
– No more CP2000's?
Circular 230
• New page - 31 U.S.C. §330. Practice
before the Department
• Adding RTRP throughout document effective 8/2/2011
• References to OPR changed to IRS in
most of document
• §10.1 Offices - adding "and any other
office(s) within the Internal Revenue
Service necessary to administer and
enforce this part."
Definitions
• Enrolled Agent definition not changed
• Neither was attorney or CPA
• Definition of RTRP in §10.3(f)
RTRP Practice Defined §10.3(f)
• (1) not currently under suspension or
disbarment from Practice before IRS
• (2) limited to preparing and signing tax
returns
• (3) may represent taxpayers before
revenue agents, customer service reps, or
similar employees of IRS during an
examination if RTRP signed return
RTRP Continued
• (4) if practicing under paragraph (f)(1),
subject to provisions same as attorneys,
CPA's and enrolled agents
• §10.4 - adds RTRP to heading with
enrolled agent and enrolled retirement
plan agent
– (c) curious language?
– (d) Former IRS employees not given RTRP
status
Application to become EA,
RTRP §10.5
• (a) - (c) no real changes
• (d) Compliance and suitability checks
added
• (d) Temporary recognition becomes (e)
• (e) Appeal from denial of application
becomes (f)
Term and renewal of Status
§10.6
• (b) RTRP added to card or certificate
paragraph
• (c) Change of address added 60 day
notice requirement and also states the
most recent enrollment application or
renewal will be the address of record for
circular 230 purposes if no notification is
sent
• (d) Renewals information split up for
specific dcesignation
More §10.6
• (e) Condition for renewal and (f) Qualifying
continuing education - RTRP added
• (f) Qualifying continuing education
removed (1)(C) qualifying sponsor
• (f)(2)(iii)(C) Maximum CPE for
instructors/presenters limited to 4 hours for
RTRP's or 6 hours for EA's per year - was
50 percent of annual requirement
• (f)(2)(iv) CPE credit for writing articles,
books, etc. has been removed.
CPE Continued
• (f)(3) Periodic examination limited to EA's
and ERPA's
• Sponsors section (g) removed and
reworked as new §10.9 Continuing
education providers
Even More CPE
• (i) now (h)(1) Recordkeeping for CPE
changed from 3 years following renewal
date to 4 years
• (j) now (i)(5) Added protest rights if request
for waiver of CPE requirements is not
granted
Other Changes
• §10.7 Representing Oneself (c) Limited
practice, (1)(viii) removed, now RTRP
• (e) Preparing tax returns and furnishing
information moved to §10.8
– Must be less than substantially all
Other Continued
• §10.8 Customhouse brokers changed to
Return preparation and application of rules
to other individuals
– (a) Paid preparers must have PTIN
– (a) Must be attorney, CPA, EA or RTRP to
obtain PTIN unless prescribed by form,
instructions, etc.
– (c) Other individuals - subject to subparts B
and C of Circular 230