Preparer Tax Identification Numbers

• Prior to 2011, tax return preparers could use either their Social Security number or a preparer tax identification number on a return that they prepared for a fee. The new IRS regulations require all paid tax return preparers to obtain and use a PTIN on returns they prepare for compensation. The IRS regulations do not license tax preparers, but provide for registration and oversight of paid tax return preparers.
  
  

Competency Exam

• The new tax return preparer requirements include passing a competency exam. The first exams become available in mid-2011. Preparers who obtain a PTIN before the exam is available have until 2013 to take and pass the competency exam. Once the exam is rolled out, preparers must pass the exam before they can obtain a PTIN. Upon passing the competency exam and obtaining a PTIN, the preparer becomes an IRS Registered Tax Return Preparer. Licensed attorneys, certified public accountants, and enrolled agents in good standing with their licensing agency qualify for an exemption from the examination requirement, but must still obtain a PTIN. Also exempt are preparers who do not sign returns and are directly supervised by an attorney, CPA, or enrolled agent, and those who do not prepare returns in the 1040 series.
  
  

Continuing Education

• The IRS Registered Tax Return Preparer program includes a continuing education requirement for tax preparers. As of January 2011, the specifics of the continuing education program are unknown, and no start date is scheduled. Preparers who are exempt from the competency exam are also exempt from the continuing education requirement.
  
  

State Requirements for Tax Preparers

• As of the 2009 IRS paid tax return preparer review, four states had developed their own regulation programs for tax preparers. Oregon requires licensing of tax preparers, while California, Maryland and New York law requires tax preparers to register with the state. States may require surety bonds or continuing education in addition to licensing or registration.