IRS To Introduce Fees On Tax Preparers

by Mike Godfrey, Tax-News.com, Washington

28 July 2010

The US Internal Revenue Service (IRS) on July 22 proposed regulations that would establish a fee for individuals who apply for a preparer tax identification number (PTIN).

The latest regulations are in addition to proposed regulations issued in March, which would require certain tax return preparers to obtain a PTIN. The IRS is working to finalize those proposed regulations, which are the first of a series of steps planned to increase oversight of federal tax return preparation.

The proposed regulations (REG-139343-08) would establish a fee of USD50, payable to the IRS, to cover technology costs, as well as compliance and outreach efforts associated with the new PTIN program. The proposed regulations would also provide for an additional fee (expected to be substantially lower than USD50) to be charged by the third-party vendor chosen to operate the new online system. That fee amount is expected to be announced soon, as well as additional details about the launch of a new online application system.

The fees are to pay for a number of proposals emanating from a comprehensive six-month study of the tax return preparer industry. “With more than 80% of American households using a tax preparer or tax software to help them prepare and file their taxes, higher standards for the tax return preparer community will significantly enhance protections and service for taxpayers, increase confidence in the tax system and result in greater compliance with tax laws over the long term,” the IRS explained.

Tax professionals and other interested parties have until August 23, 2010, to submit comments regarding the proposed regulations. The official publication date of these proposed regulations is July 23.

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