Hiring a Tax Preparer

The IRS began the process of regulating all paid tax return preparers in 2011.  A PTIN or Preparer Tax Identification Number is now required by all tax preparers. The government required that all licensed professionals renew their PTIN as well. This includes CPA's, Attorneys and Enrolled Agents (EA's).

Why is this important? Well, up until 2011, anyone could prepare a tax return for pay without any suitability check and without being licensed or regulated.  Only those professionals with a CPA, EA or a lawyer had to adhere to strict regulations.  This is changing by the end of 2013 when all legitimate tax preparers will be required to have an RTRP designation. RTRP stands for Registered Tax Return Preparer and the designation is granted via a competency exam that covers the 1040 series of forms and the Circular 230 covering professional ethics. All legitimate tax preparers will also be required to have the PTIN until the IRS stops issuing them.

Because the new regulations don't take effect until 2014, there will still be those unlicensed and possibly unethical individuals who have not passed any competency exam preparing taxes without knowing or caring about your best interest. The use of a PTIN does not guarantee that the tax preparer you are employing is qualified or licensed. Please use diligence in hiring a tax preparer. Look for the proper designations such as RTRP, EA, CPA or tax attorney. At the very minimum, your tax professional should posses an RTRP designation. This ensures that your tax return preparer is accountable to the IRS when he/she signs your tax return.

Article by: Joan Villazon, CFO

Consumer Debt Solutions, Inc.

http://www.consumerdebtsolutions.net