Tax Services Miami Preparers Go Line by Line Carefully making sure that we squeeze every penny to get you the largest tax refund possible. Taxes Done Right.

Tax preparation is the process of preparing tax returns, often income tax returns, often for a person other than the taxpayer, and generally for compensation. Tax preparation may be done by the taxpayer with or without the help of tax preparation software and online services. Tax preparation may also be done by a licensed Tax Services Miami professional such as an attorney, an accountant or enrolled agent, or by an unlicensed tax preparation business. Because United States income tax laws are considered to be complicated, many taxpayers seek outside assistance with taxes (53.5% of individual tax returns in 2016 were filed by paid preparers).

Tax Services Miami has licensing requirements for anyone who prepares tax returns for a fee and some for fee-based preparation of state tax returns only. Commercial tax preparation software, such as TurboTax, is widely used by individuals preparing their own tax returns. The Free File Alliance provides free tax preparation software for individuals with less than $72,000 of adjusted gross income for the tax year 2020. People who make more than $72,000 can use Free File Fillable Forms, electronic versions of U.S. Internal Revenue Service (IRS) paper forms.

National registration

 Until 2011, the U.S. Internal Revenue Service did not have a requirement for national registration of paid tax return preparers in the United States. However, effective January 1, 2011, new rules required the registration of almost all paid federal tax return preparers. Many of the new rules, however, were soon struck down by a federal court.

The new rules had required that some Tax Services Miami paid preparers pass a national tax law exam and undergo continuing education requirements. Persons who are certified public accountants (CPAs), attorneys or enrolled agents were required to register, but were not required to take the exam and were not subject to the continuing education requirements.

For purposes of the registration requirement, the IRS had defined a “tax return preparer” as “an individual who, for compensation, prepares all or substantially all of a federal tax return or claim for refund. Beginning in mid-2011, tax return preparers (other than CPAs, attorneys, and enrolled agents and a few others) had generally been required to take and pass a competency test to become a registered tax return preparer.

Tax Services Miami who had a Practitioner Tax Identification Number (PTIN) before testing was to become available were to have until December 31, 2013, to pass the competency test. New tax return preparers would have been required to pass the competency test before they could obtain a PTIN. The IRS had indicated that the new rules would have applied to all kinds of federal tax returns, including income taxes and payroll taxes. A new continuing education requirement of 15 hours per year would have been imposed on tax return preparers (except for CPAs, attorneys, enrolled agents, and a few others).

In 2013, however, the United States District Court for the District of Columbia struck down most of these rules in the Loving case, holding that the Internal Revenue Service had no authority to require competency exams for tax preparers. The Court did indicate its decision did not affect the PTIN requirement. This requirement remains in effect.

All tax return preparers, including those tax return preparers who are attorneys, certified public accountants, or enrolled agents, are still required to have a PTIN. This rule continues to be effective for the preparation of any federal tax returns after December 31, 2010.

Federal Controversy

The cost of preparing and filing all business and personal tax returns is estimated to be $100 to $150 billion each year. According to a 2005 report from the U.S. Government Accountability Office, the efficiency cost of the tax system—the output that is lost over and above the tax itself—is between $240 billion and $600 billion per year. For tax return preparation, Americans spent roughly 20% of the amount collected in taxes (estimating the compliance costs and efficiency costs is difficult because neither the government nor taxpayers maintain regular accounts of these costs). Tax preparation businesses have been plagued with controversies over refund anticipation loans. Intuit, the developer of tax preparation software TurboTax, has lobbied to prevent the IRS from setting up a web portal for electronic tax filing. This lobbying resulted in the introduction of the proposed Taxpayer First Act of 2019.