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IRS to tax tax-preparers?

    IRS to micro-manage tax preparers. I suspect the IRS is doing this so it can put the tax preparers out of business who don't bring in enough revenue!

Source

IRS raises bar for tax preparers who charge fees

by Max Jarman - Nov. 10, 2010 05:39 PM

The Arizona Republic

Tax preparers will come under increased oversight by the Internal Revenue Service, which for the first time is requiring them to obtain a preparer tax-identification number and uphold certain competency standards before they can work on returns, starting next year.

About 21,000 tax preparers in Arizona and more than 1 million nationwide already have the ID numbers but must renew them before Jan. 1 to work on 2010 returns next year.

Renewal notices will be mailed out next Wednesday.

Many preparers, or those who charge a fee to work on income-tax returns, never applied for the numbers and were allowed to use their Social Security number as an identifier.

The Arizona Society of Certified Public Accountants and other groups have endorsed the new rules, which were approved in January.

The IRS estimates about 139 million returns will be filed nationally in 2011, including about 2.7 million in Arizona. More than 60 percent of those likely will be put together by a tax preparer, it says.

Both new and renewing preparers also will be held to certain competency and ethical standards.

Those who are not CPAs, attorneys or IRS-enrolled agents will have to pass a competency test and meet certain annual continuing-education requirements. (The above referenced groups are exempted because their membership charters already require basic competencies and continuing education.)

"The IRS wants to be sure all tax preparers are competent and stay up on any changes in the tax laws," said Bill Brunson, a spokesman with the IRS in Phoenix.

Tax preparers will be required to pay an initial $64.25 fee this year and a yet undetermined amount annually when they renew or obtain their preparer tax-identification numbers.

The annual renewal process will make it easier for the IRS to weed out incompetent preparers and those with a track record of abusing tax laws, officials said.

Earlier this week, an attorney and a CPA from Mesa were sentenced to prison terms for promoting fraudulent foreign tax shelters to clients.

Tax preparers can register and obtain their numbers online at www.irs.gov/taxpros, or request a paper application by calling 1-877-613-7146.

   

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