IRS Did Not Revoke PTINs for Unsuitable Preparers

Post Date: 11/2/15
Last Updated: 11/2/15


Cross References
- Treasury Inspector General for Tax Administration report dated August 27, 2015

Effective September 2010, the IRS issued regulations requiring preparers to register for a preparer tax identification number (PTIN) to be used to sign all tax returns prepared. This number allows the IRS to administer its preparer program and match preparers to the tax returns they submit to the IRS. As of April 1, 2015, more than 696,000 individuals were assigned an active PTIN for calendar year 2015.

A report issued by the Treasury Inspector General for Tax Administration (TIGTA) on August 27, 2015, said that the Return Preparer Office (RPO) at the IRS has established processes and procedures to ensure that individuals assigned a PTIN were at least 18 years of age, were not using identifying information associated with a deceased individual, and correctly reported professional credentials.

In addition, the RPO ensured that individuals participating in the new Annual Filing Season Program met educational requirements and consented to be subject to the duties and restrictions of practicing before the IRS under Treasury Department Circular 230. This voluntary program was initiated in an effort to ensure that unlicensed tax return preparers have a basic competency level and adhere to professional standards.

However, the RPO does not revoke PTINs from tax return preparers who are not compliant with their tax filing and payment obligations. In January 2015, the RPO identified 19,496 preparers with PTINs who were potentially noncompliant with these obligations. These preparers had over $367 million in tax due as of January 26, 2015. In addition, the RPO identified 3,055 preparers who failed to file required tax returns for one or more tax years and eight tax return preparers who failed to file required tax returns for five years.

The TIGTA review of PTIN holders as of September 30, 2014, identified 3,001 preparers who self-reported a felony conviction on their application with 87 reporting a crime related to Federal tax matters. The TIGTA report said processes do not ensure that PTINs assigned to prisoners or individuals barred from preparing tax returns are revoked. Specifically, the RPO did not revoke the PTINs assigned to 65 of 445 confirmed prisoners and 15 of 87 individuals who the IRS identified as barred from preparing tax returns.

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