We got through the first tax season under the new PTIN (preparer tax identification number) so a quick update.
The IRS has announced that they have issued or renewed 700,000 PTIN. This actually surprises me a little because when the process first started the IRS sent out over 1 million notices to paid preparers explaining that they have to renew their PTIN. Adding the preparers who never had a PTIN and taking off the ones who have left the business makes me wonder; are they still hundreds of thousands who still need to register? If there are, they need to do it before testing starts later in the year. That gives them a grace period to take the test. Once the testing begins, potential preparers will have to pass the test before they can register.
The IRS has also begun the task of sorting through through the PTINs and weeding out the bad apples. They recently announced that they had sent notices to 19 preparers who lied about a criminal tax conviction or have been permanently banned from preparing taxes. They have 20 days to explain why their PTIN should not be revoked. 19 isn’t a lot but the action demonstrates that the IRS is serious about cleaning out some of these people.
The IRS has also announced that they have issued two contracts as part of the preparer licensing process. The first is that the firm Prometic will be responsible for administering the licensing test. They are the firm currently administering the SEE (enrolled agent) test. The test is projected to begin later in the year. And Daon Trusted Identity Services will be handling the fingerprinting of applicants. This is part of the background checks into criminal and fraud charges. Fingerprinting has always been a part of becoming an ERO or Electronic Return Originator (being able to e-file) now it’s being expanded to include employees who work for an ERO.
Of course, the tax preparer support community is gearing to offer test review materials. I have already seen offers of workshops, online course and self study.
Finally, not directly related to preparer licensing, the IRS has finally set the cost for EA renewal and that will beginning again. EAs must have a PTINs and without the cost adjustment would have been paying for the compliance checks twice. The IRS put renewals on hold until they could make a price adjustment. Now that the new price ($30) has been set, the renewals will begin in a month or so. The IRS is planning on sending out notices soon.