What is needed to open up an income tax business?

Answer 1

This will all start before the last part of the year 2010 and will be in effect for the filing of the 2010 income tax returns starting the first of January 2011 filing season.

Mandatory Tax Return Preparer Registration

• The IRS will require all individuals who are required to sign a federal tax

return as a paid tax return preparer to register and obtain a preparer tax

identification number. The IRS may charge a reasonable, nonrefundable

fee to register as a tax return preparer. The preparer tax identification

number will be the exclusive number used to identify any tax return

preparer submitting returns to the IRS;

• The IRS will study the impact and necessity of expanding this registration

requirement to nonsigning tax return preparers in the future;

• The IRS will make tax return preparer registration effective for three-year

periods and require tax return preparers to renew their registration every

three years.

II. Competency Examination Requirement

The IRS will establish competency testing for all paid tax return preparers

required to register with the IRS who are not attorneys, certified public

accountants or enrolled agents;

The IRS will require 15 hours of annual continuing professional education, including three hours of federal tax law updates, two hours of tax preparer ethics and 10 hours of federal tax law topics, for tax return preparers who are required to register;

Go to the IRS.gov web site and use the search box for Publication 4832 (Rev. 12-2009) IRS Commissioner's - Return Preparer Review

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