July 27, 2011 12:00 am

IRS Finds 100,000 Paid Preparers without New PTINs

Starting January 1, 2011, all paid preparers were supposed to obtain new preparer tax identification numbers (PTINs) from the IRS to use on the returns they prepared. Now, the IRS says that about 100,000 used old PTINs or their Social Security numbers and did not follow the new PTIN rules. Some unscrupulous preparers evaded the new rules simply by not signing the returns they prepared.

The IRS announced that it will send letters to taxpayers they know who did not obtain new PTINs. Later this year, the IRS will try to track down “ghost preparers” (those who did not sign returns) by contacting taxpayers with returns that appear to have had professional assistance. The IRS will tell these taxpayers of the need to use only compliant preparers (those registered with the IRS).

Source: IR-2011-74, 7/12/11

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Tax Glossary

Capitalization

Adding a cost or expense to the basis of the property.

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