California Tax Education Council
PTIN Mandate Takes Effect
Monday, January 3, 2011 - 5 commentsEffective January 1, 2011, the IRS is requiring all paid tax preparers who prepare or assist with preparing federal tax returns to have a Preparer Tax Identification Number (PTIN). Applicants will have to pay a $64.25 fee and renew their PTIN each year.
Because it is an IRS mandate, CTEC-registered tax preparers (CRTPs) will no longer be allowed to renew their CTEC registration unless they have a valid PTIN. CRTPs will not be exempt from any of the new IRS examination, continuing education and PTIN registration requirements no matter their years of experience or credentials.
Continuing Education
The IRS has created a Return Preparer Office to handle the new registration system, testing and continuing education (CE) requirements. Nonexempt tax preparers, including CRTPs, will have to complete15 federal CE hourseach year:
- 3 hours of federal tax law updates
- 2 hours of tax ethics
- 10 hours of other federal tax law topics
Originally the IRS publicized that the CE requirement would take effect 2011; however, on October 26, 2010,IRS Commissioner Doug Shulman announced “…during the first year (2011) of implementation, we intend to waive the requirement for continuing education. This will give us time to work through the many issues regarding CE...”
Shulman did not give a tentative start date.
The IRS has not announced any plans to implement a qualifying education (QE) prerequisite; however, CTEC will continue to enforce its 60-hour QE requirement for new CRTPs.
CTEC is working to conform its federal CE requirement to the IRS’ so CRTPs are not forced to complete “double” federal education requirements. The new CTEC hours will be revised to 15 hours federal and 5 hours state. The conformity will require a legislative change. The effective date has yet to be determined.
Competency Test
As of December 2010, the IRS has not announced an exact start date or fee for the competency exam.
Nonexempt tax preparers, including CRTPs, will have three years from the date of initial registration to pass two levels of IRS examination. Tax preparers can take it as many times as needed; however, a fee will be charged for each test. The IRS also plans to require a third test after the initial three-year implementation phase is complete.
Nonexempt tax preparers that register and obtain a PTIN before the testing centers are operational (estimated to happen mid-2011) will have three years from the date of initial registration to pass the IRS competency exam. Tax preparers who fail to get a PTIN before the IRS testing centers are operational will not be allowed to register and obtain a PTIN until they pass the IRS competency exam.
As of January 1, 2011, CRTPs cannot prepare or sign federal tax returns for a fee until they have a valid PTIN.
Tax Preparer Enforcement
The IRS plans to implement an enforcement strategy for the 2011 tax season. The Franchise Tax Board enforcement program will remain intact for California. All CRTPs will be required to complete IRS and CTEC requirements in order to be legally qualified to prepare state and federal tax returns.
To learn more about the new IRS requirements, visit www.irs.gov/taxpros.
Comments
OOOPS! CTEC is registering and monitoring registration requirements of nonexempt PAID tax preparers. Thanx
CTEC is a "service" organization...This means it provides the service of registering and monitoring requirements of registration of nonexempt paid tax in Calif. It is NOT to be confused with,like Calif. Bar Assn.(membership body)for lawyers, or Calif. Board of Accountancy (membership body)for CPAs.. CTEC is a LISTING service with some legal clout for sanctioning.
I call around to various Cash Advance places and they said that they just need the w-2. The people doing the work are not Tax Preparers but they assured me that they have someone they can call or available online that could answer any questions I might have. I will fill out the non compliance form. Thanks
It has come to our attention that 2 or more of these "Check Cashing" business are now advertising and doing taxes in office. We sudo mystery shopped for more info and found that work is done by "Front Desk" personel, who will take your documents, enter data, and let you know your refund and efile your return. When asked if they had any licence or registration to do that, all staff stated they really didn't know who was registered, they just enter do it and their corparate office is in charge. Other than just doing this till someone tells them to stop, is anyone aware of how they might be doing this legally? (State of CA)