The IRS issued final regulations Tuesday (TD 9527) implementing components of the IRS’ initiative to register and regulate all paid tax return preparers. The regulations, which finalize proposed regulations issued in August 2010 (REG-138637-07), revise regulations under Title 31, part 10, commonly known as Circular 230, which govern the practice
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Practice Management & Professional Standards
IRS Exempts CPA-Supervised Nonsigners From New Preparer Rules
On Thursday, the IRS released guidance on the implementation of new regulations governing tax return preparers (Notice 2011-6), and provided an exception to its return preparer regulation plan for nonsigning preparers supervised by a CPA, attorney, enrolled agent or other Circular 230 practitioner. The notice also provides an exception for
IRS Commissioner Predicts Relief From Testing and Continuing Education for CPA-Supervised Nonsigning Preparers
The IRS will likely provide relief from testing and continuing education requirements for nonsigning tax preparers working under the supervision of a CPA or other federally authorized tax practitioner, such as an attorney or enrolled agent, in a CPA or other professional firm, IRS Commissioner Doug Shulman said Tuesday. In
Tax Return Preparation Mistakes
Errors and omissions in preparing tax returns can occur easily. You might accidentally enter a number incorrectly, misinterpret a law, or misconstrue the client’s facts. Later, before an IRS audit, you might discover the mistake, raising gut-wrenching questions: Do you call the mistake to your client’s attention? Do you advise
AICPA Testifies About Tax Return Preparer ID Plan
Patricia Thompson, CPA/PFS, vice chair of the AICPA’s Tax Executive Committee, spoke Thursday at an IRS hearing on the IRS’ plan to require all paid tax return preparers to obtain and use a preparer tax identification number (PTIN). She said the IRS’ PTIN proposal, along with its proposal to make
Changes in Tax Practice Standards Affect CPAs
Expansions in the regulatory environment in recent years are forcing CPA tax practitioners to consider many new compliance issues. Those issues include expanded statutory penalty provisions, revisions to regulations, and modifications to binding AICPA ethics rules related to tax engagements. CPAs subject to this wide array of rules and regulations
Registration of CPAs, Other Paid Tax Preparers to Start in 2011
The IRS recently provided additional details and a timetable for its proposed requirements for registration of all paid, signing tax return preparers including CPAs. The target date for starting implementation of the registration requirement is September 2010. Preparers who don’t already have one will need to obtain a Preparer Tax
AICPA Positions on Recent IRS Proposals
Editor’s note: The AICPA Tax Division prepared this summary. IRS COMMISSIONER SHULMAN’S ANNOUNCEMENT ON UNCERTAIN TAX POSITIONS On Jan. 26, IRS Commissioner Doug Shulman released a new proposal (see tinyurl.com/ydy4v7e) that would require companies to disclose “uncertain” tax positions in their annual income tax return filings (based on FIN 48
AICPA Submits Comment Letter on IRS PTIN Proposal
The AICPA submitted comments to the IRS Monday on its proposed regulations (REG-134235-08) that would require tax return preparers, including nonsigning preparers, to apply for or renew a preparer tax identification number (PTIN) and exclusively use that PTIN when signing tax returns. (See prior JofA coverage on these proposed regulations,
Circular 230 Best Practices
Circular 230, section 10.33, on best practices deals with providing advice and preparing a submission to the IRS. This section affects several aspects of tax practice, including clear client communications, the importance of the conclusions reached, acting fairly and with integrity, and having procedures to ensure best practices. Section 10.33
Tax From the Top: Q&A With IRS Commissioner Doug Shulman
In March 2008, Doug Shulman became the 47th commissioner of the IRS, after serving as vice chairman of the Financial Industry Regulatory Authority (FINRA). Within months, the financial crisis hit and the IRS was given the task of administering a number of new economic stimulus and tax relief provisions, in
IRS Updates FAQs on Proposed Return Preparer Registration Plan
The IRS updated its online frequently asked questions page about its proposal to require return preparers to register with the IRS and for unenrolled preparers to pass a test and take annual continuing professional education (CPE) courses. (For prior JofA coverage, see “IRS Proposes New Requirements for Return Preparers” (1/5/10).)
IRS to Register and Test Signing Preparers
The IRS on Jan. 4 said it will require registration of paid, signing tax return preparers as well as competency testing and continuing education for preparers other than practitioners (CPAs, attorneys and enrolled agents and others authorized to practice before the IRS). The plan also calls for extending the requirements
Senate Passes Bill to Limit Reportable Transaction Penalties
The Senate passed a bill (S. 2917) Tuesday that would modify the amount of the penalty for failure to report tax shelter transactions under IRC § 6707A. The Small Business Penalty Fairness Act of 2009 passed by unanimous consent. The bill would set the amount of the penalty under section
IRS Proposes New Requirements for Return Preparers
The IRS on Monday announced plans to require mandatory registration of all paid, signing tax return preparers as well as competency testing and CPE requirements for preparers other than CPAs, attorneys or enrolled agents. The plan also calls for extending Circular 230’s ethics rules to all return preparers. Following a
IRS Provides Guidance on Return Preparer Liability Under IRC Section 7216
On Wednesday, the IRS issued two revenue rulings (Rev. Ruls. 2010-4 and 2010-5) that provide guidance to tax return preparers on situations in which they will not be liable for civil or criminal penalties under IRC § 7216 for disclosing or using tax return information. IRC § 7216 prohibits a
Revised Statements on Standards for Tax Services Take Effect Jan. 1
The AICPA has released revised Statements on Standards for Tax Services (SSTS), whichbecome effective Jan. 1, 2010. The SSTS are enforceable standards of tax practice for AICPA members that address each member’s obligations regarding the following issues: The level of authority needed to recommend a tax return position or
Shulman: ‘Big Shift’ Possible in Preparer Standards, But No Details Yet
IRS Commissioner Douglas Shulman discussed return preparer standards, enforcement in a globalized economy and a new IRS initiative focused on high-wealth individuals’ tax compliance during a speech to the AICPA’s National Tax Conference in Washington on Monday. Return Preparer Oversight In June, Shulman announced during a hearing of the House
The IRS Whistleblower Program: What CPAs Should Know
Since Congress amended IRC § 7623 in 2006, the IRS’ new Whistleblower Office has seen significant interest from potential informants with tips about multimillion-dollar cases of tax noncompliance. In the first 12 months after it was established in February 2007, the Whistleblower Office received 116 reports of underpayments of more
Line Items
IRS to Recommend New Tax Preparer Standards The IRS plans before the end of the year to recommend new standards for tax preparers, Commissioner Doug Shulman announced June 5. In testimony before the House Ways and Means Oversight Subcommittee and in a news release, Shulman said he would propose to
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