PTIN Renewal Period Underway - New Continuing Education and Testing Requirements Apply to Some Preparers (Parker's Federal Tax Bulletin: October 28 2012)

The IRS is reminding the nation's federal tax return preparers that they must renew their preparer tax identification numbers (PTINs) for 2013. IR-2012-79 (10/28/12).

In a news release issued this week, the IRS reminded the nation's 730,000 federal tax return preparers that they must register with the IRS and have a PTIN, as must all Enrolled Agents.

Additionally, some return preparers have new continuing education and competency test requirements. The online PTIN renewal process (www.irs.gov/ptin) takes about 15 minutes. Renewed PTINs will be valid for calendar year 2013. According to the IRS, it has significantly upgraded the PTIN system to make it easier to use and more intuitive. Preparers who have forgotten their log-in information, password, or email address can use online tools to resolve these issues, the IRS said.

Observation: Practioners may want to consider the mail-in PTIN renewal form instead of online renewal so as to not provide your email and phone number to all of the PTIN list buyers. Remember the PTIN list can be purchased by anyone directly from the IRS for $35. (Additional insight from Bob Jennings, Jennings Seminars 11/11/2012)

New continuing education and testing requirements also apply to approximately 340,000 preparers who previously had no such requirements. These preparers must certify when renewing their PTIN for 2013 that they have completed the 15-hour requirement for continuing education in 2012. The IRS is urging preparers who have a competency test requirement to take the time now to schedule an appointment for the exam.

Observation: Enrolled Agents, CPAs and attorneys are exempt from the new continuing education requirements because they already pass more extensive tests and take continuing education courses to satisfy their professional credentials.

The following are the requirements for the competency test requirements:

1. Enrolled Agents: 72 hours every three years; Obtain a minimum of 16 hours per year (2 of which must be on ethics)

2. Enrolled Retirement Plan Agents: 72 hours every three years; Obtain a minimum of 16 hours per year (2 of which must be on ethics)

3. Registered Tax Return Preparers: 15 hours per year (beginning in calendar year 2012); 2 hours of ethics, 3 hours of federal tax law updates, 10 hours of other federal tax law

4. Registered Tax Return Preparer candidates (provisional PTIN holders who have until 12/31/13 to become RTRPs): 15 hours per year (beginning in calendar year 2012); 2 hours of ethics, 3 hours of federal tax law updates, 10 hours of other federal tax law

Additionally, preparers with a testing requirement should schedule their tests, whether it is the Registered Tax Return Preparer (RTRP) test or the more extensive Special Enrollment Exam (SEE) for those interested in becoming Enrolled Agents. The RTRP test can be scheduled online through the PTIN system by selecting next steps and additional requirements from the PTIN account Main Menu. The SEE can be scheduled online at www.prometric.com/see.

Observation: The IRS is warning preparers who wait until next year to schedule a test that they may find it difficult to arrange the test at a convenient date, time, and location.

For a discussion of the PTIN requirements, see Parker Tax ¶275,100.

Staff Editor at Parker Tax Publishing

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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