Late April 2011 the IRS announced that enforcement of the new return preparer rules has commenced, with the initial focus being on preparers with criminal convictions.
A comparison of Preparer Tax Identification Numbers (PTIN)s against a database held by the IRS’ Office of Professional Responsibility identified 19 preparers who either have criminal convictions that they failed to disclose upon applying for a PTIN, or who had already been permanently enjoined from preparing returns. Those preparers have twenty days to respond with documentary evidence as to why they shouldn’t have their PTIN revoked.
Also under the spotlight are returns received that have irregular preparer details. Such irregularities being checked include incomplete preparer information, for example, the absence of a PTIN or preparer signature, and/or numbers other than PTINs being furnished.
The new return preparer rules apply to any person who receives compensation for preparing all, or substantially all, of a United States tax return or disclosure. Penalties for non-compliance start at US$50 per offence, including for such offences as a failure by the preparer to sign a return he/she prepared, and are capped at US$25,000 per annum.