Welcome

[thepensionmaven]

Welcome to the new ERPA message board.

Feel free ask your questions, express your concerns.

[Guest Spock]

Welcome to the new ERPA message board.

Feel free ask your questions, express your concerns.

Can an ERPA represent a client (or an employer, if the ERPA is in a corporate role) with the DOL (such as for a DFVC filing), or only with the IRS?

Thanks.

[My 2 cents]

I asked it before in another discussion thread and I will ask it here:

Where does it say in any formal guidance or notices issued by the IRS that someone who does not work on tax filings or refund requests but who does prepare 5500 filing materials has to obtain a PTIN?

[thepensionmaven]

I asked it before in another discussion thread and I will ask it here:

Where does it say in any formal guidance or notices issued by the IRS that someone who does not work on tax filings or refund requests but who does prepare 5500 filing materials has to obtain a PTIN?

I believe this comes about as a result of IRS Circular 230. Additional guidance on this matter is to be found at the following link: Proposed reqts for 5500 preparers.

[My 2 cents]

Thanks for the link, but it is actually under "tax professionals" and is titled "proposed guidance for tax return preparers". It does not (at least openly) refer to the form 5500 filings.

The form 5500 filing is not a tax return, and does not involve the payment of taxes or have anything to do with requests for tax refunds. If there is a specific reference within the guidance to the form 5500, I would very much appreciate its location, because otherwise I question the applicability of the proposed regulations to pension professionals who are involved with preparing 5500 filings but who are involved with neither corporate nor individual tax return preparation. Unless the IRS explicitly ties it into these rules, the 5500 filings are too peripheral to tax issues to trigger the need for 5500 preparers to obtain a PTIN.

[Tom Poje]

The IRS has indicated the following (http://www.irs.gov/taxpros/article/0,,id=210909,00.html):

Tax return preparers who have PTINs before testing becomes

available will have until Dec. 31, 2013, to pass the competency

test. After testing becomes available, new tax return preparers will be required to pass the competency test before they can obtain a PTIN.

the tests the IRS requires have absolutely nothing to do with the 5500 (at least at this time) and to require passing those for 5500 filers seems kind of a stretch, though they do hint they will provide additional guidance (as indicated in bold)

The two competency tests are described as covering: 1) Wage & non business 1040 and 2) Wage and Small Business 1040. What does small business include? And how would this impact those who prepare other business returns? (revised 7/20/10)

For competency testing purposes, small business will include Form 1040 Schedules C, E and F and various other 1040 related forms. Appendix I of the Return Preparer Review report contains a detailed list.

Additional guidance for individuals who do not prepare any Form 1040 series returns and who are not an attorney, CPA, or enrolled agent will be provided when testing is implemented.The IRS plans to add a third test with regard to business tax rules after the three-year implementation phase is completed.

if this guidance takes as long as the new SSA schedule it may be awhile before anything gets implemented.

[thepensionmaven]

This has been the subject of much discussion over the last few years. As pension professionals and preparers of Form 5500, we are indeed tax preparers as much as we may not like to be called such. I draw your attention to an ASPPA asap 08-24 which you will have to get from the ASPPA website as I do not think I can duplicate it for you here. Basically, The Small Business and Work Opportunity Act of 2007 expanded the definition of a "tax preparer" and expands coverage to include preparers of any return (not just tax returns). Further clarification can be found in IRS Notice 2008-13, and the three Exhibits contained therein. These Exhibits are lists of what the IRS considers "tax returns", and guess what? Form 5500 is included in Exhibit 2. Exhibit 2 is a list of "information returns that may subject the preparer to a penalty.

Thanks for the link, but it is actually under "tax professionals" and is titled "proposed guidance for tax return preparers". It does not (at least openly) refer to the form 5500 filings.

The form 5500 filing is not a tax return, and does not involve the payment of taxes or have anything to do with requests for tax refunds. If there is a specific reference within the guidance to the form 5500, I would very much appreciate its location, because otherwise I question the applicability of the proposed regulations to pension professionals who are involved with preparing 5500 filings but who are involved with neither corporate nor individual tax return preparation. Unless the IRS explicitly ties it into these rules, the 5500 filings are too peripheral to tax issues to trigger the need for 5500 preparers to obtain a PTIN.

[thepensionmaven]

It is my understanding that if you complete the ERPA requirements and are granted ERPA status before these tests are required, you do not have to comply with these "competancy tests." (That's one of the reasons I just took and passed ERPA I.)

The IRS has indicated the following (http://www.irs.gov/taxpros/article/0,,id=210909,00.html):

Tax return preparers who have PTINs before testing becomes

available will have until Dec. 31, 2013, to pass the competency

test. After testing becomes available, new tax return preparers will be required to pass the competency test before they can obtain a PTIN.

the tests the IRS requires have absolutely nothing to do with the 5500 (at least at this time) and to require passing those for 5500 filers seems kind of a stretch, though they do hint they will provide additional guidance (as indicated in bold)

The two competency tests are described as covering: 1) Wage & non business 1040 and 2) Wage and Small Business 1040. What does small business include? And how would this impact those who prepare other business returns? (revised 7/20/10)

For competency testing purposes, small business will include Form 1040 Schedules C, E and F and various other 1040 related forms. Appendix I of the Return Preparer Review report contains a detailed list.

Additional guidance for individuals who do not prepare any Form 1040 series returns and who are not an attorney, CPA, or enrolled agent will be provided when testing is implemented.The IRS plans to add a third test with regard to business tax rules after the three-year implementation phase is completed.

if this guidance takes as long as the new SSA schedule it may be awhile before anything gets implemented.

[Tom Poje]

accoring to the IRS web site:

How are enrolled retirement plan agents and enrolled actuaries affected by the recommendations? (posted 7/22/10)

Enrolled retirement plan agents and enrolled actuaries must obtain a PTIN if they are compensated for preparing, or assisting in the preparation of, all or substantially all of a federal tax return or claim for refund. But they will be exempt from the competency test requirement if they only prepare returns within the limited practice areas of these groups.

Because a Preparer Tax Identification Number (PTIN) is going to be mandatory in the future, can I go ahead and get one now? (revised 8/19/10)

No. In preparation for the launch of the new online registration system, effective 8/22/10, the IRS has ceased processing PTIN applications on Forms W-7P, Application for Preparer Tax Identification Number, and through e-services, Online Tools for Tax Professionals.

Individuals who do not have a PTIN and are preparing a return prior to the launch of the new registration system will have to use their social security number to satisfy the identification number requirements in the paid preparer section of the return.

[My 2 cents]

OK, I looked at the IRS Notice and see that it does seem to apply to 5500 preparation. Thanks for pointing out where the 5500 is tied in to the proposed requirements. I still think that the tax implications of a 5500 filing are seldom going to rise to the level of significance indicated in the Notice.

The following addresses the comment from earlier today concerning the need, prior to issuance of a PTIN, of a paid preparer having to use his or her SSN in the paid preparer part of the return:

Prior to this year, the "paid preparer" information was explicitly optional. That is, service providers assisting in the preparation of 5500 materials as part of a group of services provided to the plan (whether administrative or actuarial) did not have to identify themselves as paid preparers on the 5500 form.

The Form 5500 itself for 2009 does not appear to include any place to show such information. Perhaps there is something in the submission process (I have not been involved in any actual submissions to date). If so, is it mandatory (or optional, as before)? Otherwise, reporting paid preparer information would not be part of the 5500 filing at all.

This assumes that the paid preparer does not have authority to make the filing on his or her own. Any filings we submit are expected to be on the written direction of the plan sponsor.

[Bird]

The Form 5500 itself for 2009 does not appear to include any place to show such information. Perhaps there is something in the submission process (I have not been involved in any actual submissions to date). If so, is it mandatory (or optional, as before)? Otherwise, reporting paid preparer information would not be part of the 5500 filing at all.

It's not on the 2009 5500 forms and won't be on the 2010 forms. So, if you are preparing a 2010 form in 2011, you will have to have a PTIN but there won't be a place to put it.

Because a Preparer Tax Identification Number (PTIN) is going to be mandatory in the future, can I go ahead and get one now? (revised 8/19/10)

No. In preparation for the launch of the new online registration system, effective 8/22/10, the IRS has ceased processing PTIN applications on Forms W-7P, Application for Preparer Tax Identification Number, and through e-services, Online Tools for Tax Professionals.

Individuals who do not have a PTIN and are preparing a return prior to the launch of the new registration system will have to use their social security number to satisfy the identification number requirements in the paid preparer section of the return.

Just to clarify this point, unenrolled preparers will be able to get PTINs through the new system when it is running. They'll eventually (Dec 31 2013) have to pass the competency test or become enrolled to renew it.

[thepensionmaven]

To clarify the clarification, CPAs, Attorneys and enrolled Agents who are active and in good standing within their licensing organizations are exempt from the competancy testing requrements, as are Enrolled Actuaries and ERPAs.

The Form 5500 itself for 2009 does not appear to include any place to show such information. Perhaps there is something in the submission process (I have not been involved in any actual submissions to date). If so, is it mandatory (or optional, as before)? Otherwise, reporting paid preparer information would not be part of the 5500 filing at all.

It's not on the 2009 5500 forms and won't be on the 2010 forms. So, if you are preparing a 2010 form in 2011, you will have to have a PTIN but there won't be a place to put it.

Because a Preparer Tax Identification Number (PTIN) is going to be mandatory in the future, can I go ahead and get one now? (revised 8/19/10)

No. In preparation for the launch of the new online registration system, effective 8/22/10, the IRS has ceased processing PTIN applications on Forms W-7P, Application for Preparer Tax Identification Number, and through e-services, Online Tools for Tax Professionals.

Individuals who do not have a PTIN and are preparing a return prior to the launch of the new registration system will have to use their social security number to satisfy the identification number requirements in the paid preparer section of the return.

Just to clarify this point, unenrolled preparers will be able to get PTINs through the new system when it is running. They'll eventually (Dec 31 2013) have to pass the competency test or become enrolled to renew it.

[rcline46]

If their is to be competency exam, then NO ONE should be exempt from the exam. Of the titles listed only the ERPA and Enrolled Actuary have a shot at getting it right. THe others do NOT normally do 5500's and in my experience usually get it wrong.

[John Feldt ERPA CPC QPA]

The choir agrees.

[Tom Poje]

but the issue is that no such exam exists at this point. They talk of 2 different exams dealing with 1040s, but they will have to come up with an exam for those who only do 5500. they still don't have the form available for the SSA, just how are they going to come up with some type of exam for '5500 filers'.

plus, how do you handle the following:

the office has an actuary, so they are 'otherwise excludable' from the test, but still need the PTIN.

now, someone else in the office fills in the 5500. everything is done through e-fast 2. have you violated the rules?

does everyone in the office need to pass testing, and just how are you going to prove all this.

or

the office only does small plans. so only the form 5500-SF (or 5500 EZ) will ever be filed. do I have to pass compentency since there are no attachments?

just what items on this form could be filled in 'wrong' that change the orbit of the world?

[John Feldt ERPA CPC QPA]

Oh, we all want things to be thought through and planned out in advance, sure.