According to a report by the Treasury Inspector General for Tax Administration (TIGTA), federal oversight of paid return preparers through the new preparer regulation will not be fully operational until 2014. The IRS has been implementing plans to register all paid preparers, create a database of those prepares and establish testing and suitability checks. About one-million paid return preparers were required to register and receive new PTINs for 2011.
Reportedly, not all preparers will be required to undergo suitability checks and competency tests until 2014. This is said to be from a lack of resources available to the IRS. The IRS is supposed to take action against preparers who fail to comply with the new regulations, but the systems are not yet capable of gathering the required data on preparers.
I suppose the IRS will save the PTIN fees in a piggy bank in effort to acquire the needed resources through 2014 to actually complete implementation on the programs tax preparers started paying for.. this year.
In other news (1099 Reporting Update):
The Senate approved a bill to repeal the expanded 1099 reporting requirements on February 2nd. They did so 81-17, a wide margin. This requirement was signed into law by the Patient Protection and Affordable Care Act (PPACA), but has been widely criticized by most tax professionals, small businesses and anyone else who is involved in the current process. Some have estimated that the 1099 filing costs would rise as much as 2000% for small businesses under the new law. The new law was one of the provisions to help offset the cost of health care reform.
More to come if this bill becomes law and the new 1099 rules are repealed.