IRS Provides Relief for Retirement Plan Providers


During 2010, the Treasury Department rolled out two initiatives intended to increase the oversight of and improve the competency of paid tax return preparers. The Treasury released:

Final regulation §1.6109-2, which generally requires all tax return preparers who are compensated for preparing, or assisting in the preparation of, all or substantially all of a U.S. federal tax return or claim for refund to obtain a preparer tax identification number (PTIN) prior to filing any return after December 31, 2010. All federal tax return preparers, even those who already had a PTIN, are required to register in the new system. PTINs are required for each individual preparer and may not be obtained for a company or office. There is an annual fee to maintain a PTIN; and Proposed regulations that require paid preparers to pass a competency examination in order to receive a PTIN, to take 15 credit hours of continuing education annually, and to comply with IRS Circular 230 ethics rules. The competency examination will be available in mid-2011. Preparers who obtain a PTIN prior to that time will have until December 31, 2013, to pass the examination. The continuing education requirements are expected to take effect in 2013. Attorneys, CPAs, enrolled actuaries, enrolled agents, and enrolled retirement plan agents, all of whom are already governed by Circular 230, may be exempt from this requirement (but not from the PTIN requirement).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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