With the PTIN registration deadline sneaking up on us, a few more bits of information have come to light.
The first is a podcast from Lynn Nichols and the fine folks at the Ohio Society of CPAs. In it, Nichols reviews the origins of the PTIN movement and the requirements themselves, which boil down to this: “If you're a CPA and you have a practice and prepare tax returns, you have to have a PTIN,” says Nichols. “Everyone who works for you who exercises any discretion in the preparation of a return … has to have a number.
“The AICPA has done all it can and the IRS is unyielding,” he adds.
Next is a message from Marie Wright, a senior stakeholder liaison with the IRS. It begins with a notice that has been added to the IRS's online PTIN resource center:
Attention joint filers with different last names. Please wait until December 6, 2010, to submit a PTIN application if: your last return was married filing jointly, you were the secondary spouse on the return, and you have a different last name than your spouse. We are addressing a system issue that has prevented joint filers with different last names from getting their PTIN. We apologize for any inconvenience.
“Any other preparers who have experienced difficulty with registration may also want to try again beginning on Dec. 6 as other miscellaneous programming improvements are being conducted at the same time,” Wright says.
Wright also highlights two new FAQs that have been added to the IRS's PTIN scenarios. Both of the questions center on reporting agents:
7. I am a reporting agent who prepares Forms W-2, Forms W-4 and Forms 94X series returns for my clients for compensation. I do not exercise any discretion or independent judgment on my client's underlying tax positions and I do not render tax advice to any of my clients. Do I need a PTIN?
No. The PTIN regulations incorporate the carve-out from the definition of tax return preparer in Treasury Regulation section 301.7701–15(f) for individuals who provide only typing, reproduction, or other mechanical assistance in the preparation of a return or claim for refund. Example one under Treasury Regulation section 301.7701-15(f)(6) provides that reporting agents who do not exercise any discretion or independent judgment on the client's underlying tax positions and who do not render tax advice to any clients are carved-out under this exception and, therefore, are not tax return preparers.
8. I am a reporting agent who prepares Forms W-2, Forms W-4 and Forms 94X series returns for my clients for compensation. On occasion, my clients ask me for assistance with issues such as determining whether their workers are employees or independent contractors for federal tax purposes. Do I need a PTIN?
Yes. The PTIN regulations require all tax return preparers who are compensated for preparing, or assisting in the preparation of, all or substantially all of a tax return or claim for refund of tax to register and obtain a PTIN. The carve-out from the definition of tax return preparer for individuals who provide only typing, reproduction, or other mechanical assistance in the preparation of a return or claim for refund does not apply to reporting agents who render tax advice to any client (example two under Treasury Regulation section 301.7701-15(f)(6)).
The latest PTIN information can be found in our professional issues updates or our tax-related CPE programs.