Lawyer Darrin T Mish has
provided an update of the new PTIM procedures in “Tax Preparers To Be Fingerprinted By IRS” at his IRS PROBLEM SOLVER BLOG.
In discussing the
fingerprinting process he says –
“Attorneys, CPAs, enrolled agents, enrolled retirement plan agent and
enrolled actuaries are not likely to be required to be fingerprinted. But they
must declare whether they have been convicted in a felony the last 10 years.
This is one of the standard questions in the PTIN application.”
Enough is enough!
It is bad enough that
attorneys and CPAs are exempt from the initial proficiency test and required
CPE in federal taxation, allegedly because they have already passed tests (with
little if anything to do with 1040s) and are already required to take CPE (but
not in federal taxation). But if I have
to waste my time and drag myself to some supposed central location and be
fingerprinted in order to continue to make a living why not attorneys and CPAs
who want to prepare 1040s?
And conversely, if the
IRS is willing to take the word of someone with initials already after their
name that they have not been convicted of a felony in the past 10 years why is
my word not just as good?
Why this
fingerprinting in the first place?
Registration is good, but this is going overboard. Fingerprinting has nothing to do with
verifying one’s ability to prepare 1040s.
EA’s were not
fingerprinted when they applied for the designation (according to an EA). I do not believe CPAs or attorneys are
fingerprinted before being awarded their initials (if I am wrong, please tell
me). I don’t know if engineers or
architects or doctors are fingerprinted as part of their regulation regime, but
I doubt it very much. I do know that
EROs (Electronic Return Originators) were fingerprinted, which is also
ridiculous.
It is my understanding
that the fingerprinting is solely for the purpose of doing the “background
check”. The fingerprint record will be
destroyed once this has been processed, and not kept in a permanent data base. This better be true!
The proficiency exams
will begin soon, and I must pass it by 2013.
I am not rushing out to be among the first to be tested. I will wait until they are sure that it works
properly.
To be perfectly honest, I am
secretly hoping that there will be so many problems with administering the test
that the IRS will rethink its position and decide to do some kind of
“grandfathering”.
Also
exempt from the proficiency test are supervised employees of attorneys, CPAs, or
EAs employed by a law firm, CPA firm, or other recognized firm, who prepare but do not sign, and are not
required to sign, federal 1040s (and 1040As).
These are the “underlings” of CPA and legal firms who actually do all or
most of the work but do not sign the return so the client thinks a CPA or
lawyer prepared the return and will pay the excessive fee.
These
employees have not passed the CPA exam or the Bar exam (not that they are anh
test of 1040 knowledge). There is no
proof, via the testing that is required of me, that they know their arse from a
hole in the ground about federal income taxes.
So why are they exempt?
First
of all there should be grandfathering. For example, as I suggested in my letter
to the IRS on the subject back in the summer of 2009, “tax
practitioners who have been preparing federal individual income tax returns
consistently for five years (60 months), who have earned 50 hours of Continuing
Professional Education credit in Individual Income Taxation in the two year (24
month) period prior to registration, and who are not currently prohibited from
preparing federal income tax returns because of past bad acts will be exempt
from taking the initial proficiency examination.”
This is merely my suggestion. The
look-back period and accumulated CPE could be different.
Second,
ALL individuals who are required to
have a PTIN – basically all individuals who want to prepare 1040s (and 1040As)
for a fee – except Eas would be required to take the proficiency test, unless
exempt under grandfathering, and maintain 15 hours of CPE in federal income tax
annually. This includes CPAs and
attorneys and supervised employees.
Enrolled Agents would be exempt because they have already passed a more
extensive test in federal taxation and have annual federal taxation CPE
requirements in excess of the RTRP. CPAs
and attorneys who pass the test, or are grandfathered, and maintain the CPE
will be endowed with the additional initials RTRP (i.e. John Doe, CPA, RTRP). Only RTRPs and EAs will be allowed to prepare
federal individual income tax returns for a fee.
TTFN