Professional Tax Preparers become RTRPs

Your PRO-TAX preparers are already professionals, and we’re glad the IRS is beginning to acknowledge them.

Up until last year, anyone could learn to prepare tax returns and either work as a Tax Preparer within an organization, or set themselves up an independent business-owner doing tax preparation. Taxpayers who did not want to bother with learning to prepare their own returns were glad to pay someone else to do it. Tax preparation service for individuals became especially attractive in the 1980’s when the IRS introduced electronic filing as a way to cut operational costs. The IRS could now process returns much more quickly, and the banks – through the tax preparation firms – started offering Refund Anticipation Loans or RALs to taxpayers who were happy to pay a small fee in order to get their refund “instantly”.

From the 1980’s up to the present, there has been a steady increase in the percentage of individuals who use the services of a professional tax preparer. As the tax return profession was growing, the IRS tax code was becoming more and more complicated. Last year – 2010 - the IRS rolled out the first part of their new Return Preparer Initiative. The goal of this initiative is to regulate the tax preparation industry so that the taxpayers will receive better, more consistent service and filed returns will have fewer errors.

The first significant step for paid preparers took place last year, when the IRS announced that the optional registration of a PTIN (Preparer Tax Identification Number) with the IRS would be required starting January 1, 2011 for anyone who prepares all or substantially all of any federal tax return for pay. On September 28, 2010, the IRS launched an online PTIN sign-up system that requires preparers to create an account, complete the PTIN application, pay a $64.25 fee and get a PTIN. Even preparers who previously had PTINs had to renew their numbers through the new sign-up system. For preparers who did not wish to use the online system, the IRS also created a new paper application, Form W-12.

This new PTIN sign-up process allows the IRS to see how many paid federal tax return preparers there are, and to create a searchable database that can be used by taxpayers. It also creates an online account for preparers that eventually will allow them to track their testing and education courses, which most preparers will be required to pass if they wish to continue working as a paid tax preparer.

Currently, preparers can obtain their PTINs prior to testing, but once the IRS competency exam is available in fall of 2011, preparers will need to pay a testing fee and pass the exam before obtaining a PTIN. In addition, the IRS will require each preparer to pass a background check and be finger-printed. Once the preparer has completed all these requirements, the IRS will assign them the designation of Registered Tax Return Preparer or RTRP.

At PRO-TAX, we have tax professionals in every one of our offices who are on track to complete these IRS requirements. If you love preparing taxes and providing excellent customer service, we invite you to join the professionals at PRO-TAX! Just click on the link below to go to the Employment page of this website, and apply now!

Employment at PRO-TAX

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