Preparers of taxes will have to register

You hire a tax return preparer every April because you figure he knows what he's doing.

Now, he'll have to prove it.

An Internal Revenue Service program now requires tax preparers to register with the agency, take continuing education classes, meet ethics standards and pass a competency test.

The IRS said Thursday that nearly 7,000 tax preparers statewide have registered with the agency, per new regulations. But preparers who aren't attorneys, certified public accounts or enrolled agents also have to pass an IRS competency test. In Nevada, more than 3,200 preparers have yet to do so.

They have until Dec. 31, 2013, to take the exam, or they won't be IRS-certified to do business.

Raphael Tulino, an IRS spokesman, recommended that preparers take the exam soon in case they don't pass and need to try again.

The rule doesn't apply to lawyers, CPAs or enrolled agents because they already must meet professional testing requirements.

In Nevada, 55.5 percent of taxpayers, or 700,000 out of 1.26 million, have someone else prepare their returns.

Rosemary Dallman, an enrolled agent who prepares tax returns at JD's Tax & Financial Solutions Corp. in Las Vegas, called the regulation a "great idea" and an important consumer protection for taxpayers.

"We've had so many clients who suffered from returns incorrectly prepared by other people who said they were tax preparers, but they really weren't," Dallman said. "Some companies more or less recruit these people to tell taxpayers, 'Oh, I'll get you a big refund.'"

Taxpayers are partly liable for mistakes on returns prepared by others because they supplied information for the paperwork, Dallman said.

Ralph Fass of Family Tax Service also said he likes the rule.

"There have been a lot of people doing taxes who've never been licensed, registered or trained," Fass said. "They just hang a sign outside, and unfortunately, a lot of people see the sign and think they're a professional. This is a wonderful thing the IRS is doing. I'm all in favor of continuing to tighten the requirements for people doing taxes."

The IRS has also established a new registered tax return preparer credential. Consumers will eventually be able to search a public database to see if their tax preparer meets IRS criteria, or to find a preparer who has passed the competency test.

Tax preparers who want to take the test should visit www.irs.gov/ptin to schedule an exam. It costs $64.25 to register as a preparer with the IRS, and $116 each time you take the test.

Contact reporter Jennifer Robison at
jrobison@reviewjournal.com or 702-380-4512.
Follow @J_Robison1 on Twitter.