IRS Proposes New Registration, Testing and Continuing Education Requirements
for Tax Return Preparers Not Already Subject to Oversight
WASHINGTON –– The Internal Revenue Service kicked off
the 2010 tax filing season today by issuing the results of a landmark six-month study that proposes new registration,
testing and continuing education of tax return preparers. With more than 80 percent of American households using a tax
preparer or tax software to help them prepare and file their taxes, higher standards for the tax 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.
To bring immediate help to taxpayers this filing season, the IRS also announced a sweeping new effort to reach tax return
preparers with enforcement and education. As part of the outreach effort, the IRS is providing tips to taxpayers to
ensure they are working with a reputable tax return preparer. Based on the results of the Return Preparer Review released
today, the IRS recommends a number of steps that it plans to implement for future filing seasons, including: Requiring all paid tax return preparers who must sign a federal
tax return to register with the IRS and obtain a preparer tax identification number (PTIN). These preparers will be subject to
a limited tax compliance check to ensure they have filed federal personal, employment and business tax returns and that the
tax due on those returns has been paid. Requiring competency tests for all paid tax return preparers
except attorneys, certified public accountants (CPAs) and enrolled agents who are active and in good standing with their
respective licensing agencies.
Requiring ongoing continuing professional education for all paid tax return preparers except attorneys, CPAs, enrolled agents and
others who are already subject to continuing education requirements.
Extending the ethical rules found in Treasury Department Circular 230 -- which currently only apply to attorneys, CPAs and
enrolled agents who practice before the IRS -- to all paid preparers. This expansion would allow the IRS to suspend or
otherwise discipline tax return preparers who engage in unethical or disreputable conduct.
Other measures the IRS anticipates taking are highlighted in the 55-page report
released today.
Currently, anyone may prepare a federal tax return for anyone else and charge a fee. While some preparers are currently licensed
by their states or are enrolled to practice before the IRS, many do not have to meet any government or professionally mandated
competency requirements before preparing a federal tax return for a fee.
First Step: Letters to 10,000 Preparers
The initiatives announced today will take several years to fully implement and will not be in effect for the current 2010 tax season.
In the meantime, the IRS is taking immediate action to step up oversight of preparers for the 2010 filing season.
Beginning this week, the IRS is sending letters to approximately 10,000 paid tax return preparers nationwide. These preparers are
among those with large volumes of specific tax returns where the IRS typically sees frequent errors. The letters are intended to
remind preparers to be vigilant in areas where the errors are frequently found, including Schedule C income and expenses, Schedule
A deductions, the Earned Income Tax Credit and the First Time Homebuyer Credit.
Thousands of the preparers who receive these letters will also be visited by IRS Revenue Agents in the coming weeks to discuss their
obligations and responsibilities to prepare accurate tax returns. This is part of a broader initiative by the IRS to step up its
efforts to ensure paid tax return preparers are assisting clients appropriately. Separately, the IRS will be conducting other
compliance and education visits with return preparers on a variety of issues.
In addition, the IRS will more widely use investigative tools during this filing season aimed at determining tax return preparer
non-compliance. One of those tools will include visits to return preparers by IRS agents posing as a taxpayer.
During this effort, the IRS will continue to work closely with the Department of Justice to pursue civil or criminal action as
appropriate.
The full text of the news release is at
www.irs.gov/newsroom/article/0,,id=217781,00.html
No specific dates of implementation are given, but rumor has it by next year at least parts will be implemented.
Foreclosure Prevention Plan
The following is a summary of the terms and conditions of the new "Foreclosure Prevention Plan",
recently unveiled by the Obama administration. Information contained in this email was gleaned from the
WSJ and is posted in detail at the US Treasury website,
www.financialstability.gov
The "Foreclosure Prevention Plan" or "mortgage bailout", as it is called, comes in two forms: loan modification and loan refinancing. To qualify for loan modification one must have payments of more than 31% of pretax monthly income and can prove financial hardship. You must be near default on your mortgage. Loan modification only applies to a first home, which can be a condo, cooperative apartment, etc., but cannot exceed a mortgage of $729,750. This modification does not apply to 2009 mortgages.
To qualify for loan refinancing one must have a mortgage guaranteed by Fannie Mae or Freddie Mac and are current on their payments and have a mortgage balance of no more than 105% of the market price. Home values will be estimated by the loan servicer
To determine if your loan is guaranteed by Fannie Mae or Freddie Mac contact your loan servicer, (where you send your loan payment), or call 1-800-Freddie or 1-800-7Frannie.
Lenders will charge a fee for the refinancing or the modification. The modification program will last until December 31, 2012 and the refinancing program will last until June of 2010.
This plan is to begin immediately so contact your loan servicer or your loan guarantor immediately for further information.
Business Services Online (BSO) Availability -
BSO website
Monday-Friday 5:00 AM to 1:00 AM Eastern Time Saturday 5: 00 AM to 11:00 PM Eastern Time
Sunday 8:00 AM to 11:30 PM Eastern Time
Password Reminders
- Passwords must be changed every 365 days to keep your User ID (PIN) active. Keep in mind that you can change your password as often as you like, but remember to make a note of the new one.
- If you have forgotten your password, you can request a new one online. Select "Log In" from the BSO home page at www.ssa.gov/bso/bsowelcome.htm, once you pass the General Log Attestation page, you can select "Forgot your password?" from the Log In to BSO page. Or, you may call the Employer Reporting Assistance number at 1-800-772-6270.
- It takes up to 2 business weeks to receive a temporary password.
Use the Social Security Number Verification Service
(SSNVS) website
- Submit names and Social Security numbers for verification online through our input screens and/or through the electronic file submission.
- Review your file for the correct formatting to ensure that the file is error-free - a properly formatted file will avoid rejection.
- Verify your entire payroll record before you file your W-2s through the SSNVS electronic file submission. You can zip (compress) your file. The transmission time required will be substantially reduced if the file is zipped.
- Correct names and Social Security numbers allow us to properly credit your employees’ earnings records which will be important in determining their future Social Security benefits.
Remove Access to BSO
- If you no longer require a service in BSO, you may deactivate some or all of your access via the "Remove Access to BSO Services" within BSO. You may only remove service(s) to which you have access.
- You should also deactivate your User ID if you leave the company.
- If you need assistance deactivating a User ID, please call the Employer Reporting Assistance number listed below.
Customer Service
Call us toll free at: 1-800-772-6270 Employer Reporting Assistance Monday through Friday: 7 AM to 7 PM Eastern Time or by email: ssa.comments@ssa.gov 1-888-772-2970 BSO Technical Assistance
Monday through Friday: 8:30 AM to 4:00 PM Eastern Time or by email: bso.comments@ssa.gov 1-800-772-1213 General Information (Social Security Information)
Monday through Friday: 7 AM to 7 PM (all time zones) For TDD/TTY call 1-800-325-0778
SSA/IRS Reporter
(The standard language below is used as the last article on all W2 News releases.)
The SSA/IRS Reporter is a newsletter issued by the Social Security Administration and the Internal
Revenue Service (IRS). It publishes articles about employment and business tax compliance.
The SSA/IRS Reporter also carries general information about best payroll and employment tax
practices as well as SSA and IRS products and services.
Current and past issues are available in both English and Spanish on
www.socialsecurity.gov/employer and
www.irs.gov and search for "Reporter."
