Time to start planning for the 2011 tax filing season.

• Author: Goldstein, Benson S.

ALTHOUGH IS ONLY MAY 2010, CPA FIRMS need to begin planning for the 2011 tax filing season. There are significant issues on the horizon, including the pending requirement for all preparers to obtain a preparer tax identification number (PTIN), the e-file mandate for tax return preparers filing individual tax returns, and the continuing phase-in of the modernized e-file platform for individual returns.

[ILLUSTRATION OMITTED]

In January 2010, the IRS released its study on the registration of tax return preparers. It recommends new requirements for preparers, such as PTINs, examinations, and continuing professional education. The AICPA supports the proposal to require the nationwide registration of paid preparers through the PTIN process. It views the IRS's goals of enhancing compliance and elevating the ethical conduct of tax preparers as being consistent with the AICPA's code of conduct and tax standards.

Upon release of the IRS recommendations, AICPA president and CEO Barry Melancon stated, "The AICPA worked closely with the IRS during the public comment period leading up to this proposal, and we believe this change will foster greater compliance with the tax code and better, more reliable service for U.S. taxpayers across the board." Melancon also stated that "we have concerns about the IRS plan to provide tax preparers who are not already CPAs, enrolled agents, or attorneys with a certification based on limited qualifications. A new IRS examination process may cause confusion among taxpayers about the relative qualifications of tax return preparers."

This column focuses on some of the technical issues preparers will need to take into account as they plan for the 2011 filing season. Tax professionals can be assured that the IRS will do its part to conduct a campaign to educate the public about the need to regulate tax preparers and that the AICPA will work with the IRS to help it implement the recommendations to meet both the public interest and CPA practice requirements.

Obtaining a PTIN

The IRS estimates that there are between 900,000 and 1.2 million tax return preparers servicing U.S. taxpayers for a fee, a number that includes CPAs, attorneys, and enrolled agents. By requiring all preparers to register and obtain a PTIN, the IRS believes it will be able to collect more accurate data on such preparers. It also believes that the new registration procedures will enable the agency to contact preparers (when appropriate) about tax updates...