In June, the IRS released the updated Circular 230 regulations, TD 9527. The regulations affect individuals who practice before the IRS and providers of continuing education programs. The regulations made the new designation of ‘Registered Tax Return Preparer’ official. Registered tax return preparers must comply with applicable rules in Circular 230. The regulations provide the procedures and requirements for renewing the designation and layout the required continuing education.
NATP found one of the provisions to potentially be an obstacle to effective tax administration. Section 10.3(f)(3) of the Circular 230 regulations states that a registered tax return preparer does not have the “authority to provide tax advice to a client or another person except as necessary to prepare a tax return……intended to be submitted to the IRS.”
Knowing this provision concerns many of their members, NATP contacted the IRS and commented accordingly on the regulations. NATP was asked in July to testify before the House of Representatives Committee on Ways and Means Subcommittee on Oversight. The hearing provided NATP the opportunity to inform and update Congress of the progress of the return preparer program as well as the above provision that needs clarification. The full text of the testimony is available: Return Preparer Review Initiative (http://www.natptax.com/
In a continuance to receive clarification and address the concerns of members, NATP held a Town Hall meeting on August 14, 2011, in St. Louis during the National Conference. The Town Hall meeting consisted of NATP members and Ray Wagner, IRS Oversight Board member. In this meeting, NATP members expressed their concerns over this provision as well other IRS initiatives. Wagner promised to bring these concerns back to the IRS Oversight Board.
A few days later, at the closing banquet, David Williams, Director of the IRS Return Preparer Office (RPO), spoke and commented on this provision. Williams said that the RPO “hadn’t really focused” on this provision “until Larry [Gray] and Kathy [Stanek] brought it up”. He said, “we are going to be putting out some clarification around that” and “what it essentially will be saying… this isn’t about tax planning, what we were essentially saying is that you cannot provide legal advice, unless you are a lawyer”. Upon hearing this, the crowd of tax professionals cheered.
Hearing that the provision pertains to providing legal advice and not to tax planning has brought relief to many tax professionals. However, NATP will continue to work with the IRS until official clarification and possible provision changes are released. “NATP prides itself on looking out for its member’s right to practice, as well as being an advocate for all tax professionals,”
Members of the National Association of Tax Professionals (NATP) work at offices that assist over 11 million taxpayers with tax preparation and planning. The average NATP member has been in the tax business for over 20 years and holds a tax/financial designation and/or a college degree. NATP has more than 20,000 members nationwide. Members include individual tax preparers, enrolled agents, certified public accountants, accountants, attorneys, and financial planners. As a nonprofit professional association, NATP serves professionals working in all areas of tax practice through professional tax education, tax research, and tax office supplies. The national headquarters, located in Appleton, WI, employs over 50 staff members. Learn more at http://www.natptax.com.
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Members of NATP work at offices that assist over 11 million tax payers with preparation and planning. NATP has more than 20,000 members. Members include tax preparers, enrolled agents, certified public accountants, attorneys, and financial planners.