Now that the IRS gets to decide which of us taxpayers are authorized to prepare tax returns and which of us aren’t, it can make us do just about whatever it wants by merely threatening exclusion.
It can even force us to pay it money for the “privilege” of pursuing our chosen livelihoods.
Recently the IRS issued regulations prohibiting tax preparers from preparing tax returns for a fee unless they have a PIN number. Last week the IRS issued proposed regulations that require tax preparers to pay for those PIN numbers.¹
WebCPA has the story:
The Internal Revenue Service released proposed regulations on Thursday that would establish a $50 fee for individuals who apply for a preparer tax identification number.
Proposed regulations that were issued by the IRS in March would require certain tax return preparers to obtain a PTIN (see IRS Proposes Regulations on Preparer ID Numbers). The IRS said it is still working to finalize those proposed regulations, which are the first of a series of steps planned to increase oversight of federal tax return preparation.
The proposed regulations (REG-139343-08) would establish a fee of $50, payable to the IRS, to cover technology costs, as well as compliance and outreach efforts associated with the new PTIN program. The proposed regulations would also provide for an additional fee (expected to be substantially lower than $50) to be charged by the third-party vendor chosen to operate the new online system. That fee amount is expected to be announced soon, as well as additional details about the launch of a new online application system. The fees could change in future years as program costs are reevaluated, the IRS cautioned.
Agencies are directed by the Office of Management and Budget to charge user fees to recover the cost of services that convey special benefits beyond those available to the general public, such as the authority to prepare federal tax returns for compensation.
Tax professionals and other interested parties have until Aug. 23, 2010, to submit comments regarding the proposed regulations. The official publication date of the proposed regulations is July 23.
The IRS is a monopoly of the worst kind. It makes rules, forces you to comply with them on the threat of disbarment, fine or criminal prosecution and then charges you for complying with them.
Something is rotten in Denmark folks, and it ain’t the fish.
Footnotes:
¹ Fifty bucks isn’t going to change anyone’s life, but that’s not the point. The IRS, in establishing a PIN number issuance fee, is operating as a volume seller. The IRS estimates that there are more than 1,200,000 tax return preparers in America. At 50 bucks a pop, that’s a cool $60 million. One can answer a lot of telephone calls with that much cabbage.
Even factoring in the IRS’s notorious inefficiency, I have a hard time believing it’s going to require $60 million to assign, issue and monitor tax preparers’ PIN numbers. My guess is that the $50 fee was arrived at arbitrarily. Consequently, I think tax preparers should demand that the IRS reveal precisely how the figure was arrived at and what the cost of PIN enforcement is expected to be.
2 responses so far ↓
1 Tony // Jul 27, 2010 at 3:11 pm
Of course the $50 fee is arbitrary but then so are most license fees. Of greater interest is the discrimatory nature of charging a fee to assign and monitor a PTIN but not a CAF or POA number. If the goal is simply to bring in revenue why not require a fee to obtain an EIN? Entities are already paying hundreds of dollars to obtain a state license for their corporations, LLC’s etc. Why should an SS-4 application be free? If the answer is that assigning an EIN is part of the IRS’s job then why isn’t the same true for the PTIN?
2 Peter // Jul 27, 2010 at 6:49 pm
Tony,
Great point. I agree.
Leave a Comment