Make Sure the Person You Are Paying to Sign Your Tax Return Has A Practitioner Tax Identification # (PTIN) IRS Notice 2011-80 - John R. Dundon II, Enrolled Agent
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Make Sure the Person You Are Paying to Sign Your Tax Return Has A Practitioner Tax Identification # (PTIN) IRS Notice 2011-80

Make Sure the Person You Are Paying to Sign Your Tax Return Has A Practitioner Tax Identification # (PTIN) IRS Notice 2011-80

I routinely get calls from taxpayers who thought they had a solid trusting relationship with their tax adviser only to discover otherwise.  The stories involved are usually quite tragic as the relationship one has with their tax adviser has been shown to be one of the most trusted relationships one can have outside of marriage making the discovery of fraudulent or inept conduct difficult to shoulder.

In an effort to root out this behavior all people signing tax returns going forward must be at the very least be ‘registered’ with the IRS as a ‘return preparer’ and they must at the very least have on record with the IRS a valid Practitioner Tax Identification Number or PTIN.  Make sure the person signing your tax return puts his or her PTIN on the return next to his/her signature.

The IRS released Notice 2011-80, which provides that PTINs must now be renewed on a calendar year basis. All PTIN holders must renew their numbers using the online PTIN application or paper Form W-12 and pay the required fee ($64.25 for 2012) after Oct. 15 and before Jan. 1 annually.

Certain preparers also must pass a competency examination, undergo a suitability check and complete continuing education courses annually. The IRS will designate individuals who meet these requirements as a Registered Tax Return Preparer.

Individuals designated as a Registered Tax Return Preparer will be authorized to prepare federal tax returns and claims for refunds and to represent their clients during an IRS examination of a tax return or claim for refund that the individual signed as the paid tax return preparer.

The IRS has been issuing provisional PTINs to individuals who are not attorneys, certified public accountants, or enrolled agents to enable them to prepare tax returns prior to meeting competency testing and suitability requirements because the programs have not begun. The IRS will continue issuing provisional PTINs at least through April 18, 2012. Once the IRS stops issuing provisional PTINs, tax return preparers who are required to complete the competency test or suitability requirements must complete these requirements successfully prior to obtaining a PTIN.

The notice also provides that the 15-hour continuing education requirement for certain tax return preparers will take effect starting in 2012. Registered Tax Return Preparers and individuals required to pass the Registered Tax Return Preparer competency examination before Dec. 31, 2013, must complete the 15-hour requirement prior to renewing their PTINs for 2013 and subsequent years.

The notice also explains that certain tax return preparers who must pass a suitability check will have to provide their fingerprints so that a Federal Bureau of Investigation database search can be conducted. Generally, the fingerprint requirement will affect those preparers who currently have provisional PTINs.