IRS New Changes 2010

After a very interesting discussion with the IRS liason recently here in Pasadena.  There are some interesting changes in store for tax professionals and the unsuspecting public:

1) Tax professionals and their unlicensed staff must either re-register (get a PTIN) or register with the IRS. Registration entails getting education (CE).  IRS wants to license all tax professionals.  No word yet on foreign tax professionals.  Wonder how Ernst & Young will cope since many of its tax operations are in India.  AICPA is opposed as is most of the tax community.

2) License fee of $50 for each tax professional + computer fee for the database

3) Public database of tax professionals will now be available similar to CPA database for each state.  IRS will have ability to communicate, post issues on each preparer, censure, and promote itself like never before.

4) Efiling mandatory for most tax professional firms unless opt-out is signed, but IRS will scrutinize mass opt-outs.

5) Prior return efiling is in the works

6) Efile Individual returns will allow for attachments like corporate efile returns.

7) 1099 compliance big hot button issue internally at IRS given that 1099’s now have to be sent to everyone.  I’m sure there will be more exceptions,let’s see what sticks to the wall.

8) Payroll companies fighting preparer registration requirement, obviously

9) Many more changes in store for rest of the year.