CPA Voice November 2011 : Page 2

Latest News 2012 PTIN renewals begin Tax return preparers who have Preparer Tax Identifi cation Numbers (PTINs) can now renew their PTINs for the 2012 fi ling season. PTINs must be renewed annually before Dec. 31. Anyone who is paid to prepare or help prepare all or substantially all of tax returns or claims for refunds must have a PTIN. Paid return preparers must have valid, current PTINs to prepare tax returns in 2012. (See chart below.) The PTIN renewal fee for 2012 is $63. The application fee for a fi rst-time PTIN remains at $64.25. Return preparers who obtained their PTINs by creating an online account should renew their PTINs at www.irs.gov/ptin. Preparers who used paper applications to receive their 2011 PTINs will receive an activation code in the mail from the IRS that they can use to create an online account and convert to an electronic renewal for 2012. Individuals can also renew using a paper Form W-12, IRS Paid Preparer Tax Identifi cation Number Application, but renewing electronically avoids a wait of four to six weeks. Return preparers who are applying for a PTIN for the fi rst time must go through a strict authentication procedure and should follow directions carefully. Return preparers who prepared or helped prepare returns for compensation in 2011 without PTINs must obtain 2011 PTINs and then renew their PTINs for 2012, paying fees for each year if they intend to practice next year. Penalties may apply for paid tax return preparers who prepared or helped prepare returns in 2011 without valid PTINs. For more information on the PTIN requirements or on becoming a Registered Tax Return Preparer, go to www.irs.gov/taxpros. Investor group asking for more from auditors The PCAOB Investor Advisory Group is pushing for auditors to be responsible for including more information in audit reports. The group, which represents large investor groups, such as CALPERS calls the current audit report “defi cient as a communications vehicle.” They are calling for more information in four key areas: 1. Auditor’s assessment of estimates and judgments by management 2. Disclosure from the auditor about how the auditor identifi ed and planned for risk areas 3. Discussion on the quality of the company’s accounting practices and policies 4. Any unusual transactions, signifi cant accounting changes or restatements Typically, management is responsible for reporting such information to investors, but PCAOB Chair James Doty is actively working to shift that responsibility to auditors. As more judgment is employed on behalf of corporate management, the PCAOB Investor Advisory Group would like auditors to give their opinion on the validity of those judgments and the completeness of the information shared. The PCAOB issued a concept release June 21 presenting several alternatives for changing the auditor’s reporting model. The alternatives described in the concept release include: • An auditor’s discussion and analysis. • Required and expanded use of emphasis paragraphs. • Auditor assurance on other information outside the fi nancial statements. • Clarifi cation of language in the standard auditor’s report. OSCPA Board Chair Jim Gottfried discusses this issue on page 7. Overview of Tax Return Preparer Requirements Background Check Tax Compliance Check Continuing Education Category PTIN required Practice Rights IRS Test CPAs*** Yes Yes Yes Proposals Pending Proposals Pending Proposals Pending Proposals Pending Proposals Pending Proposals Pending No Yes (Special Enrollment Exam) Yes (RTRP Test) Varies 72 hours every 3 years 15 hours per Year Varies No No Unlimited Unlimited Enrolled Agents* Yes Registered Tax Return Preparers** Attorneys*** Supervised Preparers† Non-1040 Preparers‡ Yes Yes Limited Yes Yes Yes Yes Yes Yes No No No Unlimited Limited Limited 2 The Ohio Society of CPAs | CPA Voice | November 2011

Overview Of Tax Return Preparer Requirements

Investor Group Asking For More From Auditors

The PCAOB Investor Advisory Group is pushing for auditors to be responsible for including more information in audit reports. The group, which represents large investor groups, such as CALPERS calls the current audit report “deficient as a communications vehicle.” They are calling for more information in four key areas: 1. Auditor’s assessment of estimates and judgments by management 2. Disclosure from the auditor about how the auditor identified and planned for risk areas 3. Discussion on the quality of the company’s accounting practices and policies 4. Any unusual transactions, significant accounting changes or restatements Typically, management is responsible for reporting such information to investors, but PCAOB Chair James Doty is actively working to shift that responsibility to auditors. As more judgment is employed on behalf of corporate management, the PCAOB Investor Advisory Group would like auditors to give their opinion on the validity of those judgments and the completeness of the information shared. The PCAOB issued a concept release June 21 presenting several alternatives for changing the auditor’s reporting model. The alternatives described in the concept release include: • An auditor’s discussion and analysis. • Required and expanded use of emphasis paragraphs. • Auditor assurance on other information outside the financial statements. • Clarification of language in the standard auditor’s report. OSCPA Board Chair Jim Gottfried discusses this issue on page 7.

2012 PTIN Renewals Begin

Tax return preparers who have Preparer Tax Identification Numbers (PTINs) can now renew their PTINs for the 2012 filing season. PTINs must be renewed annually before Dec. 31. Anyone who is paid to prepare or help prepare all or substantially all of tax returns or claims for refunds must have a PTIN. Paid return preparers must have valid, current PTINs to prepare tax returns in 2012. (See chart below.) The PTIN renewal fee for 2012 is $63. The application fee for a first-time PTIN remains at $64.25. Return preparers who obtained their PTINs by creating an online account should renew their PTINs at www.irs.gov/ptin. Preparers who used paper applications to receive their 2011 PTINs will receive an activation code in the mail from the IRS that they can use to create an online account and convert to an electronic renewal for 2012. Individuals can also renew using a paper Form W-12, IRS Paid Preparer Tax Identification Number Application, but renewing electronically avoids a wait of four to six weeks. Return preparers who are applying for a PTIN for the first time must go through a strict authentication procedure and should follow directions carefully. Return preparers who prepared or helped prepare returns for compensation in 2011 without PTINs must obtain 2011 PTINs and then renew their PTINs for 2012, paying fees for each year if they intend to practice next year. Penalties may apply for paid tax return preparers who prepared or helped prepare returns in 2011 without valid PTINs. For more information on the PTIN requirements or on becoming a Registered Tax Return Preparer, go to www.irs.gov/taxpros.

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