PTIN Regulations for Chartered Accountants

PTIN Regulations are Final

If you are the preparer of US Income Tax Returns, are you aware of how new IRS regulations will affect your ability to sign returns?

• As part of an initiative to ensure tax return preparers are competent and qualified, the Internal Revenue Service has issued final regulations requiring paid tax return preparers to register with the IRS to obtain a Preparer Tax Identification Number (PTIN).
• All paid tax return preparers who prepare all of, substantially all of, or sign a tax return are required to use the new registration system to obtain a PTIN.
• All tax return preparers of US income tax returns are now required to apply for a PTIN either by applying on-line or filing a paper form W-12. The Annual application fee is $64.25 USD.
• Registered Tax Return Preparers who are not US Attorneys, CPA's, or Enrolled Agents will have to undergo competency testing to officially become registered and then complete annual Continuing Education seminars to maintain registration.

Exactly what will that mean for a Canadian Chartered Accountant?

You will need to become a Registered Tax Return Preparer if you are preparing and signing US tax returns after December 31, 2010. Generally, a social security number is required to obtain a PTIN unless the applicant is a person who does not reside in the US and is not eligible to obtain a social security number. These applicants will be required to file supplemental Form 8946 and supporting identity documentation along with their PTIN application. The application process for foreign tax preparers without social security numbers will take 2 to 4 weeks if completed on line, or 4 to 6 weeks with a paper application.

Testing requirements have yet to be set, and any PTIN application accepted before testing has been established will receive a testing waiver until December 31, 2013. There will be a testing fee (not yet established) each time an applicant attempts to pass the test.

Additionally, Continuing Education has yet to be officially established but is expected to be by the end of this year. Current expectations are that it will be comprised of: 3 hours of federal tax law updates, 2 hours of ethics, and 10 hours of other federal tax law; totaling 15 hours annually.

Having a trusted partner keeping you up-to-date with current requirements which assist you in serving your clients' various needs, can be extremely valuable in solidifying long term relations.

• We can assist in your application to become a Registered Tax Return Preparer
• Discuss options that will allow you to continue servicing your clients without having the hassle and expense of keeping up with changing IRS regulations.

For further information and clarification on these matters, please contact Scott T Jordan, CPA and Partner at (716) 250-6600.

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