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[Federal Register Volume 77, Number 31 (Wednesday, February 15, 2012)]
[Proposed Rules]
[Pages 8753-8755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3576]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-124791-11]
RIN 1545-BK37

Furnishing Identifying Number of Tax Return Preparer

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document contains proposed regulations that provide 
guidance on the eligibility of tax return preparers to obtain a 
preparer tax identification number (PTIN). These proposed regulations 
expand the list of tax return preparers who may obtain and renew a 
PTIN. The proposed regulations additionally provide guidance concerning 
those tax forms submitted to the Internal Revenue Service that are 
considered returns of tax or claims for refund of tax for purposes of 
the requirement to obtain a PTIN and related provisions. This document 
also invites comments from the public regarding these proposed 
regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by May 15, 2012.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-124791-11), Room 
5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-
124791-11), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC 20224, or sent electronically via the 
Federal eRulemaking Portal at www.regulations. gov (IRS REG-124791-11).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Stuart Murray at (202) 622-4940; concerning submissions of comments and 
requests for a hearing, Oluwafunmilayo (Funmi) Taylor at (202) 622-7180 
(not a toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background

    This document contains proposed amendments to regulations under 
section 6109 of the Internal Revenue Code (Code) relating to the 
identifying number of a tax return preparer and furnishing a tax return 
preparer's identifying number on tax returns and claims for refund of 
tax. The Department of Treasury and the Internal Revenue Service 
published in the Federal Register on September 30, 2010 (75 FR 60309) 
final regulations under section 6109 that prescribe certain 
requirements relating to the identifying number of tax return 
preparers.
    In particular, the final regulations provided that for tax returns 
or claims for refund of tax filed after December 31, 2010, the 
identifying number of a tax return preparer is a PTIN or other 
identifying number that the IRS prescribes in forms, instructions, or 
other guidance. The final regulations also provided that after December 
31, 2010, a tax return preparer must have a PTIN that is applied for 
and renewed in the manner the IRS prescribes. The final regulations 
added Sec.  1.6109-2(d) to the regulations under title 26, providing 
that to obtain a PTIN or other prescribed identifying number, a tax 
return preparer must be an attorney, certified public accountant, 
enrolled agent, or registered tax return preparer authorized to 
practice before the IRS under Treasury Department Circular No. 230, 31 
CFR part 10 (which Treasury and the IRS amended in final regulations 
published in the Federal Register on June 3, 2011 (76 FR 32286)). For 
purposes of these requirements, a tax return preparer means any 
individual who is compensated for preparing, or assisting in the 
preparation of, all or substantially all of a tax return or claim for 
refund of tax. The final regulations under section 6109 additionally 
added Sec.  1.6109-2(f), which provides that the IRS may conduct a 
Federal tax compliance check on a tax return preparer who applies for 
or renews a PTIN or other prescribed identifying number.
    Although the rules in the final regulations under section 6109 went 
into effect on January 1, 2011, Sec.  1.6109-2(h) allows Treasury and 
the IRS to prescribe, through forms, instructions, or other appropriate 
guidance, exceptions to the rules in Sec.  1.6109-2, as necessary, in 
the interest of effective tax administration. Section 1.6109-2(h) also 
provides that the IRS may specify through other appropriate guidance 
``specific returns, schedules, and other forms that qualify as tax 
returns or claims for refund for purposes of these regulations.''
    After Sec.  1.6109-2 was amended, Treasury and the IRS issued 
Notice 2011-6 (2011 IRB 315 January 17, 2011) (see Sec.  
601.601(d)(2)(ii)(b) of this chapter), which provides additional 
guidance on the implementation of Sec.  1.6109-2. Specifically, Notice 
2011-6,

[[Page 8754]]

in part, provides further guidance as to tax return preparers who may 
obtain a PTIN. As explained in Notice 2011-6, the IRS ``decided to 
allow certain individuals who are not attorneys, certified public 
accountants, enrolled agents, or registered tax return preparers to 
obtain a PTIN and prepare, or assist in the preparation of, all or 
substantially all of a tax return in certain discrete circumstances.'' 
Pursuant to the authority in Sec.  1.6109-2(h), Notice 2011-6 
established two additional categories of tax return preparers who may 
obtain a PTIN: (1) Tax return preparers supervised by attorneys, 
certified public accountants, enrolled agents, enrolled retirement plan 
agents, and enrolled actuaries (see Sec.  1.02a of Notice 2011-6); and 
(2) tax return preparers who prepare tax returns not covered by a 
competency examination applicable to registered tax return preparers 
(see Sec.  1.02b of Notice 2011-6). Notice 2011-6 prescribes the 
requirements an individual must satisfy under each of these two 
categories, including passing a Federal tax compliance check and a 
suitability check (when available). Individuals who obtain or renew a 
PTIN under either of these categories are not registered tax return 
preparers. Registered tax return preparers are subject to separate, 
more extensive requirements in Circular 230, including continuing 
education.
    Also pursuant to the authority in Sec.  1.6109-2(h), the IRS in 
Notice 2011-6 specified that all tax returns, claims for refund, and 
other tax forms submitted to the IRS are considered tax returns or 
claims for refund of tax for purposes of Sec.  1.6109-2 unless the IRS 
provides otherwise. Section 1.03 of Notice 2011-6 explains that the IRS 
interprets the term ``tax forms'' broadly for this purpose, and a tax 
return preparer must obtain a PTIN to prepare for compensation, or to 
assist in preparing for compensation, all or substantially all of ``any 
form'' except those forms that the IRS explicitly excludes. Notice 
2011-6 lists the forms by number and title that are currently excluded.

Explanation of Provisions

    Treasury and the IRS propose to incorporate the relevant provisions 
of Notice 2011-6 discussed earlier in this preamble in Sec.  1.6109-2. 
The proposed regulations provide for two additional categories of tax 
return preparers to obtain a PTIN (or other identifying number the IRS 
prescribes), namely, certain supervised tax return preparers and tax 
return preparers who prepare tax returns and claims for refund that are 
not covered by a competency examination. As to the first category, the 
proposed regulations provide that any individual 18 years of age or 
older is eligible for a PTIN if the individual is supervised as a tax 
return preparer by an attorney, certified public accountant, enrolled 
agent, enrolled retirement plan agent, or enrolled actuary authorized 
to practice before the IRS under Circular 230. The proposed regulations 
provide that the supervision must be in accordance with any 
requirements the IRS may prescribe; these requirements are currently 
set forth in Sec.  1.02a of Notice 2011-6.
    As to the second category, the proposed regulations provide that 
any individual 18 years of age or older is eligible for a PTIN if the 
individual exclusively prepares tax returns and claims for refund that 
are not covered by any minimum competency test or tests that the IRS 
prescribes for registered tax return preparers. To be eligible for a 
PTIN, an individual must certify, at the time and in whatever manner 
the IRS may prescribe, that the individual only prepares tax returns 
and claims for refund that are not covered by a minimum competency 
test. Under the proposed regulations, the individual must also comply 
with any other eligibility requirements that the IRS may prescribe; 
these requirements are currently set forth in Sec.  1.02b of Notice 
2011-6.
    The proposed regulations provide that for purposes of Sec.  1.6109-
2, the terms tax return and claim for refund of tax include all tax 
forms submitted to the IRS except forms that the IRS specifically 
excludes in other appropriate guidance. Notice 2011-6 (Sec.  1.03) is 
the current guidance specifying the excluded tax forms. The proposed 
regulations also amend Sec.  1.6109-2(f) to clarify that the IRS may 
conduct a suitability check, in addition to a Federal tax compliance 
check, on certain tax return preparers who apply for or renew a PTIN or 
other prescribed identifying number. This clarification is consistent 
with the provisions in both the final Circular 230 regulations and 
Notice 2011-6 stating that certain individuals who apply to obtain or 
renew a PTIN or to become a registered tax return preparer will be 
subject to a suitability check, as well as a tax compliance check.

Proposed Effective/Applicability Date

    These regulations are effective on the date that final regulations 
are published in the Federal Register. For proposed dates of 
applicability, see Sec.  1.6109-2(i).

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866, as supplemented by Executive Order 13563. Therefore, a 
regulatory assessment is not required. It has also been determined that 
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) 
does not apply to these regulations, and because the regulation does 
not impose a collection of information on small entities, the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. 
Pursuant to section 7805(f) of the Code, this notice of proposed 
rulemaking has been submitted to the Chief Counsel for Advocacy of the 
Small Business Administration for comment on its impact on small 
business.

Comments and Requests for Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS. Treasury and the IRS request comments on all aspects of the 
proposed rules. All comments that are submitted by the public will be 
available for public inspection and copying. A public hearing will be 
scheduled if requested in writing by any person who timely submits 
comments. If a public hearing is scheduled, notice of the date, time, 
and place for the public hearing will be published in the Federal 
Register.

Drafting Information

    The principal author of these proposed regulations is Stuart Murray 
of the Office of the Associate Chief Counsel, Procedure and 
Administration.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority:  26 U.S.C. 7805 * * *
    Section 1.6109-2 also issued under 26 U.S.C. 6109(a)

    Par. 2. Section 1.6109-2 is amended by adding a new sentence to the 
end of paragraph (a)(1) and revising paragraphs (d), (f), (h) and (i) 
to read as follows:

[[Page 8755]]

Sec.  1.6109-2  Tax return preparers furnishing identifying numbers for 
returns or claims for refund and related requirements.

    (a) * * * (1) * * * For purposes of this section only, the terms 
tax return and claim for refund of tax include all tax forms submitted 
to the Internal Revenue Service unless specifically excluded by the 
Internal Revenue Service in other appropriate guidance.
* * * * *
    (d)(1) Beginning after December 31, 2010, all tax return preparers 
must have a preparer tax identification number or other prescribed 
identifying number that was applied for and received at the time and in 
the manner, including the payment of a user fee, as may be prescribed 
by the Internal Revenue Service in forms, instructions, or other 
appropriate guidance.
    (2) Except as provided in paragraph (h) of this section, to obtain 
a preparer tax identification number or other prescribed identifying 
number, a tax return preparer must be one of the following:
    (i) An attorney;
    (ii) A certified public accountant;
    (iii) An enrolled agent;
    (iv) A registered tax return preparer authorized to practice before 
the Internal Revenue Service under 31 U.S.C. 330 and the regulations 
thereunder;
    (v) An individual 18 years of age or older who is supervised, in 
the manner the Internal Revenue Service prescribes in forms, 
instructions, or other appropriate guidance, as a tax return preparer 
by an attorney, certified public accountant, enrolled agent, enrolled 
retirement plan agent, or enrolled actuary authorized to practice 
before the Internal Revenue Service under 31 U.S.C. 330 and the 
regulations thereunder; or
    (vi) An individual 18 years of age or older who certifies that the 
individual is a tax return preparer exclusively with respect to tax 
returns and claims for refund of tax that are not covered, at the time 
the tax return preparer applies for or renews the number, by a minimum 
competency examination prescribed by the Internal Revenue Service in 
forms, instructions, or other appropriate guidance. An individual must 
comply with any requirements at the time and in the manner that the 
Internal Revenue Service may prescribe in forms, instructions, or other 
appropriate guidance.
* * * * *
    (f) As may be prescribed in forms, instructions, or other 
appropriate guidance, the Internal Revenue Service may conduct a 
Federal tax compliance check and a suitability check on a tax return 
preparer who applies for or renews a preparer tax identification number 
or other prescribed identifying number.
* * * * *
    (h) The Internal Revenue Service, through forms, instructions, or 
other appropriate guidance, may prescribe exceptions to the 
requirements of this section, including the requirement that an 
individual be authorized to practice before the Internal Revenue 
Service before receiving a preparer tax identification number or other 
prescribed identifying number, as necessary in the interest of 
effective tax administration.
    (i) Effective/applicability date. Paragraph (a)(1) of this section 
applies to tax returns and claims for refund filed after December 31, 
2008, except the last sentence of paragraph (a)(1), which applies to 
tax returns and claims for refund filed on or after the date that final 
regulations are published in the Federal Register. Paragraph (a)(2)(i) 
of this section applies to tax returns and claims for refund filed on 
or before December 31, 2010. Paragraph (a)(2)(ii) of this section 
applies to tax returns and claims for refund filed after December 31, 
2010. Paragraph (d)(1) of this section applies to tax return preparers 
after December 31, 2010. Paragraph (d)(2) of this section applies to 
tax return preparers on or after the date that final regulations are 
published in the Federal Register. Paragraph (e) of this section 
applies after September 30, 2010. Paragraph (f) of this section applies 
on or after the date that final regulations are published in the 
Federal Register. Paragraphs (g) and (h) of this section apply after 
September 30, 2010.

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2012-3576 Filed 2-14-12; 8:45 am]
BILLING CODE 4830-01-P
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