Before the IRS will accept a return e-filed by you as an Electronic Return Originator, you must be registered and obtained an electronic filer identification number (EFIN). You can e-file as a subordinate to a registered ERO with a current PTIN.
Preparer tax identification number (PTIN) applications and renewals for 2017 are now being processed.
Anyone who prepares or assists in preparing federal tax returns for compensation must have a valid 2017 PTIN before preparing returns. All enrolled agents must also have a valid PTIN.
Don’t have a PTIN and need to obtain one?
Most first-time PTIN applicants can obtain a PTIN online in about 15 minutes. The fee is $50.00. View this checklist to get started.
Are you a non-credentialed return preparer looking to set yourself APART? Do you want to be included in the Public Directory of return preparers or desire limited representation rights for your clients? If so, check out the Annual Filing Season Program which recognizes the efforts of non-credentialed return preparers who aspire to a higher level of professionalism.
What are the benefits of getting an Annual Filing Season Program – Record of Completion?
In addition to being included in the public directory of tax return preparers, the Annual Filing Season Program – Record of Completion differentiates you in the marketplace. The IRS launched a public education campaign in January 2015 encouraging taxpayers to select return preparers carefully and seek those with professional credentials or other select qualifications.
Also, beginning Jan. 1, 2016, there will be changes to the representation rights of return preparers. Attorneys, CPAs, and enrolled agents will continue to be the only tax professionals with unlimited representation rights, meaning they can represent their clients on any matters including audits, payment/collection issues, and appeals.
Annual Filing Season Program participants will have limited representation rights, meaning they can represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service.
PTIN holders without an Annual Filing Season Program – Record of Completion or other professional credential will only be permitted to prepare tax returns. For returns prepared and signed after December 31, 2015, they will not be allowed to represent clients before the IRS.
If you desire to be the ERO of your own office, responsible for all PTINs filing under your EFIN, you must apply and it could take 45 days for approval. Here are the steps:
Step 1: Create an IRS e-services Account
Step 2: Submit Your Application
Step 3: Pass a Suitability Check
Do you want to be a corporate office, perhaps looking to franchise? Or will you operate a small one man office as a sole proprietor? Some states require a business license for tax preparers, others do not. If you incorporate, you may not need a business license, however, you should check your state’s statute or the Secretary of State.
You will use your SSN on information returns if you hire workers as either employees or subcontractors and pay them at least $600. You will only need an EIN if you wish to establish a business bank account or if you incorporate.
Finally, you will want to be competitive with pricing and should compare your competitor’s pricing. Keep in mind, the IRS will hold you accountable to a certain degree for the integrity of your client’s returns.
Every approved software package for preparing and e-filing tax returns to the IRS has a ‘due diligence’ component. The IRS tasks every preparer with ‘qualifying’ tax filers eligibility to file certain forms and to claim certain credits.
This is actually a good thing for you as it will save you the embarrassment of not being able to show what information you used from the taxpayer to prepare the taxes.