Doug Tkach Elected President - The Institute of Chartered ...

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Impact of IRS Tax Preparer Registration Rules on Canadian CAs by Jennifer S. Horner The Internal Revenue Service is proceeding with proposals to require any person who prepares a US tax return for compensation to be registered with the IRS, and to obtain a unique registration number. As part of this process, all such preparers (“paid preparers”, also referred to as preparers in this article), will need to meet a minimum standards test in order to continue to be registered as a preparer. These changes come in response to a perceived need to increase public confidence in paid preparers and to increase taxpayer compliance. Some US states, such as New York, California and Oregon have already implemented their own systems for paid preparer registration. This article will discuss changes applicable to the preparation of US federal tax returns only. Based on information released so far, preparers living outside of the United States will also be subject to this new system of registration and testing. The purpose of this article is to highlight the new requirements and to discuss the particular impact on CAs in Canada who prepare US tax returns for a fee. Some key items of these proposals are as follows: • Specific instructions for foreign preparers (i.e. those preparers living outside of the United States) have not been released, and are currently in development by the IRS. There is no indication that foreign preparers will be exempt from these new requirements. • The focus of this IRS initiative appears to be paid preparers of US personal tax returns, but the rules do not appear to exclude those individuals paid to prepare other types of US returns, such as corporate, trust and estate returns. It is unclear whether the new requirements will apply only to the preparer who signs the return or to all the preparers who were significantly involved in preparing the return. • All US returns filed after December 31, 2010 will require a Preparer Tax Identification Number, or PTIN. This requirement is a bit problematic for foreign preparers as only individuals with a US Social Security Number can currently obtain FOLIO 2 a PTIN. • Registration of preparers is due to start in September 2010. Practitioners who currently have a PTIN will also be required to register (although they will be allowed to keep their current number). • Tax return preparers will need to meet a minimum standards test to qualify to continue to be registered as a preparer. Only US attorneys, certified public accountants (CPAs) and enrolled agents who are active and in good standing with their respective licensing agencies will be exempt from the testing. Testing will not be implemented until after registration and mandatory PTIN usage are in place. • Tax return preparers will be required to meet a continuing professional education standard of 15 hours per year with the exception of attorneys, CPAs and enrolled agents. • The IRS will conduct periodic tax compliance checks on all tax return preparers, and expect all preparers to meet high ethical standards. • Registration will require the payment of a fee. The amount of the fee has not been announced, but the IRS estimates such fee to be in the range of $25-100 annually per individual (or $75-300 for the three year renewal period of a PTIN). • Paid tax preparers will be required to register as individuals, even those employed by an enterprise in the business of preparing tax returns. Note that individuals who only prepare returns for their employer will not be affected by these requirements. As a consequence of these proposals, it is expected that Canadian CAs who will be preparing US returns for their clients, where such returns are filed after December 31, 2010, will be required to register with the IRS as tax preparers, and will also be required to meet the testing and continuing education requirements outlined above. Those CAs who are also CPAs and who are in good standing with a State licensing board should be exempt from the testing and continuing education requirements as long as they maintain their CPA license in good standing. The complimentary ROI e-newsletter is a valuable source of timely synopses of news, research, events, best practices, standards and regulations, recent publications and more – with links to the web-based sources – that can help you keep up-to-date with information relevant to CAs in industry. These plans have been put forward in proposed legislation, and are subject to the implementation of such legislation. Consequently specific application of these rules, the date of implementation of the registry of preparers, and date after which returns filed will require a PTIN are subject to change. Canadian CAs who prepare US tax returns should be aware of these imminent changes, and watch for further clarification from the IRS regarding the registration process for preparers living outside the US. Jennifer Horner is a Senior Tax Manager with BDO Canada LLP. Candidate Portal Improves CASB Results Release In May 2010, CASB announced a new method for delivering results to students and their training offices. Beginning with the results released in July 2010, detailed student results are available online through Candidate Portal for students and CATO Portal for CA Training Offices (CATOs). Until now, students and their firms had to wait weeks for case feedback forms, transcripts, and academic histories to arrive in the mail. Through the Portal, students can view their case feedback forms at the same time as they learn of their status in the module, and they can download their transcripts and academic histories one week later. This change marks a significant service delivery improvement from CASB as students can use the case feedback forms to debrief the module evaluation earlier than before. It also considerably reduces CASB’s carbon footprint, as two copies (one for the student, one for their firm) of the five-to-seven-page result packages for 4,000 students are no longer printed and posted from the Learning Centre in Vancouver.
Council and Officers Elected for 2010-11 At the 124 th Annual General Meeting of The Institute held on June 17, 2010, five members were elected to serve on Council for a two year term. The five members elected were Jeffrey Cristall, Gordon Dowhan, Stuart McKelvie, Teresa Okerlund and Douglas Tkach. At the Statutory Meeting of Council following the AGM, Council elected the 2010-11 Officers and members of the Executive Committee. Council is composed of the officers, members-at-large and two public representatives. 2010-11 Officers of Council Douglas J. Tkach, CA, CFA, President & Chair James D. Doer, CA, First Vice-President Rick M. MacKay, FCA, Second Vice-President Teresa L. Okerlund, CA, Secretary-Treasurer CAS Support Tool Increases Efficiency Use CICA’s CAS Support Tool to identify the Canadian Auditing Standards relevant for each phase of the audit process and see how the new standards compare to existing auditing standards set out in the CICA Handbook - Assurance. This interactive tool identifies the standards that are relevant for each phase of the audit process, provides links to comparative information in the existing standards, and points to learning resources. Go to www.cica.ca > Canadian Standards in Transition > Canadian Auditing Standards > CAS Support Tool. Doug Tkach, CA, CFA President & Chair Members-at-Large Cheryl A. Atchison, CA Stephen W. Childerhouse, CA Jeffrey G. Cristall, CA•CBV Gordon A. Dowhan, CA Larry H. Frostiak, FCA Dave Loewen, CA C. Stuart McKelvie, FCA Brenna J. Minish-Kichuk, CA Richard D. Pope, FCA Kevin E. Regan, CA Heather D. Reichert, CA Left: Margaret Redmond, President and CEO of the Assiniboine Park Conservancy was the keynote speaker at the luncheon held following the Annual General Meeting. James Doer, CA First Vice-President Right: Incoming President Doug Tkach, CA (left) and outgoing President Ian Seymour, CA (right) thank Dr. Jerry Gray for his service on Council as a public representative at the Annual General Meeting of the Institute. Rick MacKay, FCA Second Vice-President Public Representatives Elaine Goldie Anita Wortzman, LLB Teresa Okerlund, CA Secretary-Treasurer Elaine Goldie Appointed as Public Rep to Council Doug Tkach, President of The Institute of Chartered Accountants of Manitoba, is pleased to announce that Elaine Goldie was recently appointed to Council for a two year term. Elaine joins Anita Wortzman, LLB as a public representative serving on Council. As required under the provisions of The Chartered Accountants Act, CCSM C70, Elaine’s appointment was made by Dr. David Barnard, President of the University of Manitoba. She replaces Dr. Jerry Gray, who served as a public representative on Council from 2004-10. Elaine was Vice-President (External) with the University of Manitoba. She officially retired from the position earlier this year. Under the Institute bylaws, one member must work and reside outside of Winnipeg. Both Jeffrey Cristall and Brenna Minish-Kichuk meet this requirement. The two public representatives are appointed to Council by the President of the University of Manitoba. This is Anita’s second year serving as a public representative and Elaine’s first. Elaine Goldie Public Representative FOLIO 3
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