Over a decade ago, the IRS launched their Business Systems Modernization (BSM) Program in aneffort to update its technology and related business processes. A major component of that program is the modernized e-file system, an Internet-based filing platform designed to enhance and expedite service to taxpayers.

If you work with or are considering working with a tax preparer, you will want to review the following points to be aware of these changes imposed by the IRS that affect you and your tax preparer:

1) Compliance. As of January 1, 2012, all tax return preparers that prepare and file eleven or more 1040 tax returns during a calendar year must use IRS e-file. With the advent of new technology and regulations instituted by the IRS, it is more important than ever to be aware of these new procedures to work with a tax preparer who is in compliance with ever-changing IRS regulations.

2) Paper Filing. Individual tax payers may still elect to paper file but may be required to complete and attach Form 8948, Preparer Explanation for Not Filing Electronically, when filing their tax return. When you are selecting a tax preparer or working with your current tax preparer, be sure to ask him/her if they file their returns electronically with the IRS. If they do not, then you will want to explore why and consider the importance of the IRS modernized e-file system and how it can expedite the tax return process more effectively than paper filing.

3) Competency Exams for Tax Preparers. All tax return preparers who prepare form 1040 series tax returns are required to pass a competency exam. The RTRP, Registered Tax Return Preparer, competency exam will need to be passed by December 31, 2013. Attorney’s, Certified Public Accountants, and Enrolled Agents in good standing are exempt from taking this exam. This new designation was enacted to improve taxpayer compliance and service by setting professional standards and provide support to the tax preparation industry.

4) Increasing Standards. As the RTRP deadline nears, it is important that you make sure the individual that prepares your taxes is aware of this industry change. If they are already certified as an RTRP, this is a sign that they take IRS compliance and your tax return preparation seriously.

The IRS changes their rules and regulations to better service their constituents — U.S. tax payers. Tax preparers such as ATBS are committed to proactively embracing these new IRS standards and regulations by requiring its accounting and tax associates to pass the competency exam by the end of 2012 — one year prior to the IRS deadline.

As a taxpayer, you want to avoid mistakes and a Registered Tax Return Preparer in organizations like ATBS can help you avoid costly tax return mistakes. 

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