The National Association of Enrolled Agents (NAEA) recently has presented testimony at the Internal Revenue Service Public Hearing on Proposed Regulations.
The NAEA, an organization representing nearly 46,000 enrolled agents across the country, responded to the agency’s proposed tax preparer identification number (PTIN) regulations, specifically addressing the terminology surrounding the new level of paid tax return preparer that the IRS has created as part of its effort to set standards for the return preparation industry.
“To start, we believe the agency has moved in the right direction with the terminology ‘registered return preparer,’” stated Robert Kerr, NAEA senior director of government relations. “The term is both reasonable and reasonably descriptive. We focus on nomenclature today because the public must understand which person in this new universe of tax preparers is authorized to perform what services. Enrolled agents believe this fundamental truth should drive regulatory decision making.”
Unlike the new class of tentatively designated “registered return preparers,” enrolled agents, certified public accountants, and tax attorneys have unlimited authority to prepare returns and to represent taxpayers before the IRS. NAEA believes that communicating this distinction to the taxpaying public is a substantial challenge, especially in view of the IRS’s history of omitting mention of enrolled agents when communicating to Capitol Hill and the public.
The PTIN regulations are the first in a series of regulatory changes resulting from the IRS’s announcement last December that return preparers who are not enrolled agents, certified public accountants, or tax attorneys will be required to pass competency testing and complete 15 hours of annual continuing education. All signing paid return preparers will be required to register with the IRS and receive a PTIN. The ethical rules that currently apply only to enrolled agents, certified public accountants, and tax attorneys will be extended to allpaid return preparers, allowing IRS to suspend or discipline preparers who engage in unethical conduct.
“As the agency moves forward, specifically with decisions around competency exams, it has an opening to leverage a group it already licenses – enrolled agents – who have demonstrated competency in preparing the widest range of tax returns and in representation,” Kerr told the panel. “We urge you to be cognizant of this fact and to structure tests accordingly.”