[Federal Register Volume 77, Number 31 (Wednesday, February 15, 2012)]
[Proposed Rules]
[Pages 8753-8755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3576]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-124791-11]
RIN 1545-BK37
Furnishing Identifying Number of Tax Return Preparer
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document contains proposed regulations that provide
guidance on the eligibility of tax return preparers to obtain a
preparer tax identification number (PTIN). These proposed regulations
expand the list of tax return preparers who may obtain and renew a
PTIN. The proposed regulations additionally provide guidance concerning
those tax forms submitted to the Internal Revenue Service that are
considered returns of tax or claims for refund of tax for purposes of
the requirement to obtain a PTIN and related provisions. This document
also invites comments from the public regarding these proposed
regulations.
DATES: Written or electronic comments and requests for a public hearing
must be received by May 15, 2012.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-124791-11), Room
5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand-delivered Monday through
Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-
124791-11), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue NW., Washington, DC 20224, or sent electronically via the
Federal eRulemaking Portal at www.regulations. gov (IRS REG-124791-11).
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Stuart Murray at (202) 622-4940; concerning submissions of comments and
requests for a hearing, Oluwafunmilayo (Funmi) Taylor at (202) 622-7180
(not a toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed amendments to regulations under
section 6109 of the Internal Revenue Code (Code) relating to the
identifying number of a tax return preparer and furnishing a tax return
preparer's identifying number on tax returns and claims for refund of
tax. The Department of Treasury and the Internal Revenue Service
published in the Federal Register on September 30, 2010 (75 FR 60309)
final regulations under section 6109 that prescribe certain
requirements relating to the identifying number of tax return
preparers.
In particular, the final regulations provided that for tax returns
or claims for refund of tax filed after December 31, 2010, the
identifying number of a tax return preparer is a PTIN or other
identifying number that the IRS prescribes in forms, instructions, or
other guidance. The final regulations also provided that after December
31, 2010, a tax return preparer must have a PTIN that is applied for
and renewed in the manner the IRS prescribes. The final regulations
added Sec. 1.6109-2(d) to the regulations under title 26, providing
that to obtain a PTIN or other prescribed identifying number, a tax
return preparer must be an attorney, certified public accountant,
enrolled agent, or registered tax return preparer authorized to
practice before the IRS under Treasury Department Circular No. 230, 31
CFR part 10 (which Treasury and the IRS amended in final regulations
published in the Federal Register on June 3, 2011 (76 FR 32286)). For
purposes of these requirements, a tax return preparer means any
individual who is compensated for preparing, or assisting in the
preparation of, all or substantially all of a tax return or claim for
refund of tax. The final regulations under section 6109 additionally
added Sec. 1.6109-2(f), which provides that the IRS may conduct a
Federal tax compliance check on a tax return preparer who applies for
or renews a PTIN or other prescribed identifying number.
Although the rules in the final regulations under section 6109 went
into effect on January 1, 2011, Sec. 1.6109-2(h) allows Treasury and
the IRS to prescribe, through forms, instructions, or other appropriate
guidance, exceptions to the rules in Sec. 1.6109-2, as necessary, in
the interest of effective tax administration. Section 1.6109-2(h) also
provides that the IRS may specify through other appropriate guidance
``specific returns, schedules, and other forms that qualify as tax
returns or claims for refund for purposes of these regulations.''
After Sec. 1.6109-2 was amended, Treasury and the IRS issued
Notice 2011-6 (2011 IRB 315 January 17, 2011) (see Sec.
601.601(d)(2)(ii)(b) of this chapter), which provides additional
guidance on the implementation of Sec. 1.6109-2. Specifically, Notice
2011-6,
[[Page 8754]]
in part, provides further guidance as to tax return preparers who may
obtain a PTIN. As explained in Notice 2011-6, the IRS ``decided to
allow certain individuals who are not attorneys, certified public
accountants, enrolled agents, or registered tax return preparers to
obtain a PTIN and prepare, or assist in the preparation of, all or
substantially all of a tax return in certain discrete circumstances.''
Pursuant to the authority in Sec. 1.6109-2(h), Notice 2011-6
established two additional categories of tax return preparers who may
obtain a PTIN: (1) Tax return preparers supervised by attorneys,
certified public accountants, enrolled agents, enrolled retirement plan
agents, and enrolled actuaries (see Sec. 1.02a of Notice 2011-6); and
(2) tax return preparers who prepare tax returns not covered by a
competency examination applicable to registered tax return preparers
(see Sec. 1.02b of Notice 2011-6). Notice 2011-6 prescribes the
requirements an individual must satisfy under each of these two
categories, including passing a Federal tax compliance check and a
suitability check (when available). Individuals who obtain or renew a
PTIN under either of these categories are not registered tax return
preparers. Registered tax return preparers are subject to separate,
more extensive requirements in Circular 230, including continuing
education.
Also pursuant to the authority in Sec. 1.6109-2(h), the IRS in
Notice 2011-6 specified that all tax returns, claims for refund, and
other tax forms submitted to the IRS are considered tax returns or
claims for refund of tax for purposes of Sec. 1.6109-2 unless the IRS
provides otherwise. Section 1.03 of Notice 2011-6 explains that the IRS
interprets the term ``tax forms'' broadly for this purpose, and a tax
return preparer must obtain a PTIN to prepare for compensation, or to
assist in preparing for compensation, all or substantially all of ``any
form'' except those forms that the IRS explicitly excludes. Notice
2011-6 lists the forms by number and title that are currently excluded.
Explanation of Provisions
Treasury and the IRS propose to incorporate the relevant provisions
of Notice 2011-6 discussed earlier in this preamble in Sec. 1.6109-2.
The proposed regulations provide for two additional categories of tax
return preparers to obtain a PTIN (or other identifying number the IRS
prescribes), namely, certain supervised tax return preparers and tax
return preparers who prepare tax returns and claims for refund that are
not covered by a competency examination. As to the first category, the
proposed regulations provide that any individual 18 years of age or
older is eligible for a PTIN if the individual is supervised as a tax
return preparer by an attorney, certified public accountant, enrolled
agent, enrolled retirement plan agent, or enrolled actuary authorized
to practice before the IRS under Circular 230. The proposed regulations
provide that the supervision must be in accordance with any
requirements the IRS may prescribe; these requirements are currently
set forth in Sec. 1.02a of Notice 2011-6.
As to the second category, the proposed regulations provide that
any individual 18 years of age or older is eligible for a PTIN if the
individual exclusively prepares tax returns and claims for refund that
are not covered by any minimum competency test or tests that the IRS
prescribes for registered tax return preparers. To be eligible for a
PTIN, an individual must certify, at the time and in whatever manner
the IRS may prescribe, that the individual only prepares tax returns
and claims for refund that are not covered by a minimum competency
test. Under the proposed regulations, the individual must also comply
with any other eligibility requirements that the IRS may prescribe;
these requirements are currently set forth in Sec. 1.02b of Notice
2011-6.
The proposed regulations provide that for purposes of Sec. 1.6109-
2, the terms tax return and claim for refund of tax include all tax
forms submitted to the IRS except forms that the IRS specifically
excludes in other appropriate guidance. Notice 2011-6 (Sec. 1.03) is
the current guidance specifying the excluded tax forms. The proposed
regulations also amend Sec. 1.6109-2(f) to clarify that the IRS may
conduct a suitability check, in addition to a Federal tax compliance
check, on certain tax return preparers who apply for or renew a PTIN or
other prescribed identifying number. This clarification is consistent
with the provisions in both the final Circular 230 regulations and
Notice 2011-6 stating that certain individuals who apply to obtain or
renew a PTIN or to become a registered tax return preparer will be
subject to a suitability check, as well as a tax compliance check.
Proposed Effective/Applicability Date
These regulations are effective on the date that final regulations
are published in the Federal Register. For proposed dates of
applicability, see Sec. 1.6109-2(i).
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in Executive Order
12866, as supplemented by Executive Order 13563. Therefore, a
regulatory assessment is not required. It has also been determined that
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5)
does not apply to these regulations, and because the regulation does
not impose a collection of information on small entities, the
Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Code, this notice of proposed
rulemaking has been submitted to the Chief Counsel for Advocacy of the
Small Business Administration for comment on its impact on small
business.
Comments and Requests for Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) or electronic comments that are submitted timely
to the IRS. Treasury and the IRS request comments on all aspects of the
proposed rules. All comments that are submitted by the public will be
available for public inspection and copying. A public hearing will be
scheduled if requested in writing by any person who timely submits
comments. If a public hearing is scheduled, notice of the date, time,
and place for the public hearing will be published in the Federal
Register.
Drafting Information
The principal author of these proposed regulations is Stuart Murray
of the Office of the Associate Chief Counsel, Procedure and
Administration.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.6109-2 also issued under 26 U.S.C. 6109(a)
Par. 2. Section 1.6109-2 is amended by adding a new sentence to the
end of paragraph (a)(1) and revising paragraphs (d), (f), (h) and (i)
to read as follows:
[[Page 8755]]
Sec. 1.6109-2 Tax return preparers furnishing identifying numbers for
returns or claims for refund and related requirements.
(a) * * * (1) * * * For purposes of this section only, the terms
tax return and claim for refund of tax include all tax forms submitted
to the Internal Revenue Service unless specifically excluded by the
Internal Revenue Service in other appropriate guidance.
* * * * *
(d)(1) Beginning after December 31, 2010, all tax return preparers
must have a preparer tax identification number or other prescribed
identifying number that was applied for and received at the time and in
the manner, including the payment of a user fee, as may be prescribed
by the Internal Revenue Service in forms, instructions, or other
appropriate guidance.
(2) Except as provided in paragraph (h) of this section, to obtain
a preparer tax identification number or other prescribed identifying
number, a tax return preparer must be one of the following:
(i) An attorney;
(ii) A certified public accountant;
(iii) An enrolled agent;
(iv) A registered tax return preparer authorized to practice before
the Internal Revenue Service under 31 U.S.C. 330 and the regulations
thereunder;
(v) An individual 18 years of age or older who is supervised, in
the manner the Internal Revenue Service prescribes in forms,
instructions, or other appropriate guidance, as a tax return preparer
by an attorney, certified public accountant, enrolled agent, enrolled
retirement plan agent, or enrolled actuary authorized to practice
before the Internal Revenue Service under 31 U.S.C. 330 and the
regulations thereunder; or
(vi) An individual 18 years of age or older who certifies that the
individual is a tax return preparer exclusively with respect to tax
returns and claims for refund of tax that are not covered, at the time
the tax return preparer applies for or renews the number, by a minimum
competency examination prescribed by the Internal Revenue Service in
forms, instructions, or other appropriate guidance. An individual must
comply with any requirements at the time and in the manner that the
Internal Revenue Service may prescribe in forms, instructions, or other
appropriate guidance.
* * * * *
(f) As may be prescribed in forms, instructions, or other
appropriate guidance, the Internal Revenue Service may conduct a
Federal tax compliance check and a suitability check on a tax return
preparer who applies for or renews a preparer tax identification number
or other prescribed identifying number.
* * * * *
(h) The Internal Revenue Service, through forms, instructions, or
other appropriate guidance, may prescribe exceptions to the
requirements of this section, including the requirement that an
individual be authorized to practice before the Internal Revenue
Service before receiving a preparer tax identification number or other
prescribed identifying number, as necessary in the interest of
effective tax administration.
(i) Effective/applicability date. Paragraph (a)(1) of this section
applies to tax returns and claims for refund filed after December 31,
2008, except the last sentence of paragraph (a)(1), which applies to
tax returns and claims for refund filed on or after the date that final
regulations are published in the Federal Register. Paragraph (a)(2)(i)
of this section applies to tax returns and claims for refund filed on
or before December 31, 2010. Paragraph (a)(2)(ii) of this section
applies to tax returns and claims for refund filed after December 31,
2010. Paragraph (d)(1) of this section applies to tax return preparers
after December 31, 2010. Paragraph (d)(2) of this section applies to
tax return preparers on or after the date that final regulations are
published in the Federal Register. Paragraph (e) of this section
applies after September 30, 2010. Paragraph (f) of this section applies
on or after the date that final regulations are published in the
Federal Register. Paragraphs (g) and (h) of this section apply after
September 30, 2010.
Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2012-3576 Filed 2-14-12; 8:45 am]
BILLING CODE 4830-01-P