The majority of paid tax return preparers are unlicensed

June, 05 2014 by Karen Reed, EA
Tax Return Preparer Credentials

All paid tax return preparers are required to have an IRS PTIN (Preparer Tax Identification Number) which they must enter on the tax returns they prepare. But what does a PTIN mean? The PTIN system is not much more than a way for the IRS to know who charges for tax preparation, and even then it does not track “ghost preparers” − those who prepare tax returns for money but do not sign the returns.

The majority of individuals with PTINs are unlicensed preparers, and currently there are no licensing or education requirements for those who prepare federal returns. Unlicensed tax preparers are considered “unenrolled preparers” by the IRS, and they are allowed to represent only the clients whose tax returns they have prepared and signed, and only at the initial audit level.

If you are audited, seek the assistance of an Enrolled Agent (EA), CPA or attorney who specializes in tax audit defense. For detailed descriptions of each of the credentials shown in the infographic, please visit the IRS website.

Want peace of mind?

Learn About Prepaid Audit Defense

CATEGORIES
View All Articles
TaxAudit Blog Home
Submit a Question
 
Karen Reed, EA

Karen Reed, EA

 
During her years as an audit representative for TaxAudit, Karen successfully defended the company’s members throughout the entire federal and state audit processes, handled cases assigned to US Tax Court, and developed procedures to make the audit process easier for taxpayers. Karen attributes a great deal of her tax acumen to the six tax seasons she spent as a return reviewer, analyzing thousands of returns. Responding in writing to questions from taxpayers, she became familiar with the common mistakes self-preparers make. Karen was previously the manager of the Tax Education and Research Department and the Director of Communications at TaxAudit. Her tax advice has been featured in U.S. News and World Report, the Los Angeles Times, the Chicago Tribune, and other publications.
 

Recent Articles

Let's talk about small businesses and one of the most common tax issues they face: making sure their payroll tax is taken care of timely and properly.
Learn More ›
If you have qualified student loan interest, you may be able to take a tax deduction for a portion of what you paid on your federal income tax return.
Learn More ›
In this article we will discuss some key issues related to whether life insurance is tax deductible and a few potential tax benefits of life insurance.
Learn More ›
A levy is when the IRS is permitted to garnish someone’s wages, bank accounts, property (such as a house or car), investments, etc. to satisfy a tax debt.
Learn More ›
This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.