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IRS Finds 19 Improper Tax Preparer PTIN Applications

By Diane Freda
Publication Date: 04/26/2011

The Internal Revenue Service April 25 said it has identified 19 tax preparers who did not properly apply for preparer tax identification numbers and that more follow-ups will occur after the current tax filing season is over.

According to a news release (IR-2011-47), the development marks IRS's first successes in improving the quality and oversight of the tax preparation industry through the new PTIN program.

Tax preparers are required to register with the IRS and get a unique identification number to place on returns or claims for refund they prepare for compensation, after supplying the IRS with certain background information.

By comparing new preparer tax identification numbers (PTINs) with the Office of Professional Responsibility's database of preparers, the IRS was able to identify 19 preparers who applied for PTINs and either failed to disclose a criminal tax conviction or have been permanently enjoined by a court from preparing tax returns, IRS said in the release.

The IRS sent letters to all 19 individuals, proposing revocation of their PTINs. Preparers facing revocation have 20 days to file a written response and provide supporting documentation as to why their PTIN should not be revoked, IRS said.

Returns With No PTIN, No Signature

Preparers were required to tell the IRS if they had a criminal conviction when they applied for their PTIN, and were required after Jan. 1 to use a PTIN on any returns they prepared for compensation.

Once the tax filing season is over, IRS said, it will begin reviewing tax returns that were prepared by preparers who used an identifying number other than a PTIN, did not use any identifying number, or did not sign tax returns they prepared.

“Just one unscrupulous tax return preparer can cause a lot of financial damage to both taxpayers and the tax system,” IRS Commissioner Doug Shulman said in the release. Compliance with regulations that require the signing of a tax return by a paid preparer and use of the PTIN is central to our enforcement effort,” he said.

More than 700,000 tax preparers nationwide have now registered with the IRS and gotten a PTIN, and about 2,000 more are registering every week.

PTIN registration is the first step in a multi-year effort by IRS to provide standards for tax preparation, including testing for competency that will begin some time in the fall.

The complete text of this article can be found in the BNA Daily Tax Report, April 26, 2011. For comprehensive coverage of taxation, pension, budget, and accounting issues, sign up for a free trial or subscribe to the BNA Daily Tax Report today. Learn more »

© 2011, The Bureau of National Affairs, Inc.