The IRS has issued a plan to regulate federal income tax preparers based on the results of a comprehensive review of the industry, titled the Return Preparer Review. The new rules will not be in effect for the 2010 filing season.
The new regulations will include a registration requirement and competency testing. Individuals that sign tax returns as paid preparers will need to register with the IRS and pay a fee. Paid preparers that are not attorneys, certified public accountants or enrolled agents must also take a competency test.
There will be two levels of examinations, including one for the wage and small business form 1040 series. The IRS plans to introduce a third examination on business preparation once it implements these first steps. In fact, all the requirements that apply to paid preparers will eventually apply to those that prepare business tax returns as well, as confirmed by the IRS.
