PTIN - Who's responsible?

[austin3515]

Let's say Susie Tech works for Joe TPA. Joe TPA does not have Susie Tech get a PTIN, and Susie Tech continues to prepare 5500's.

Assuming she should have obtained a PTIN, who is in trouble? Joe TPA, Susie Tech or both?

[K2retire]

Further complication of your example: Susie wants to get a PTIN, understanding that it is required despit the lack of logic to the requirement. Legal department at Joe's TPA says 5500s are NOT tax returns so no PTIN is required. Now what do you do?

[Belgarath]

I'd like to hear what the lawyers think (although it is sometimes hard to know what they think, since they argue either side depending upon who they are representing - after all, that's their job.) But isn't there some sort of general legal principle that employers are liable for the acts of their employees, as long as the employees aren't exceeding their authority, etc. - and if the employer's legal department instructs the employee not to obtain or use a PTIN, then shouldn't that employee be safe?

[david rigby]

... if the employer's legal department instructs the employee not to obtain or use a PTIN, then shouldn't that employee be safe?

You can risk your letters, but not me.

[austin3515]

Hey now, easy there...

No one's doing anything, just trying to learn how this all works. We;re coming down on getting the PTINs for everyone, but this was part of the thought process. I think TPA's all around the country are still trying to figure out if their employees are subject to these rules, so I don't feel like the question was too out of line...

My question is really about what if the er makes a determination that she's not subject and then it comes to light that he was wrong.

I personally think the answer to the question is quite important since at the end of the day the determination does involve judgment.

[masteff]

Just to muddy the water a bit more... the latest 5500 doesn't appear to ask for preparer information: http://www.dol.gov/ebsa/pdf/2010-5500.pdf

[movedon]

And what about the employee that gets a PTIN - does he then have risk that an employee without a PTIN doesn't have? Is the liability for his mistakes no longer only on his employer?

[Bird]

Just to muddy the water a bit more... the latest 5500 doesn't appear to ask for preparer information

That's right, the rule for 2010 returns is that you have to have a PTIN but there's no place to put it. I'm taking that as a hint to not be overly concerned about it and let it play out.

[austin3515]

But isn't that more a reflection of the fact that he 2010 form was released before the ptin regulations? Also, there's only going to be one field for ptin, and generally at least 2 people are involved. So for example, Joe TPA's PTIN might be on the form, but Susie Tech still might need a PTIN.

[austin3515]

Email from Brian Graff to all ASPPA Members:

Happy Holidays everyone. As you know, the IRS has been indicating in public comments that the PTIN registration requirements will apply to preparers of the Form 5500. Consequently, we have been engaged in ongoing conversations with the IRS on exactly how that would work. In addition to testifying at a public hearing, we have had several private meetings with them to discuss the significant problems that could result from the over broad application of a preparer registration requirement to the Form 5500. In these meetings, we have been emphasizing the information return nature of the form and the relatively limited amount of information on the form that actually impacts a tax return. Most significantly, we have been pressing the point that if too many staff are required to register it will ultimately result in an unnecessary increase in administrative costs to the detriment of retirement plan participants.

As these conversations have continued, including some back and forth on the challenging issues involved, we are beginning to believe that senior IRS officials are starting to conclude that it would simply be easier to exempt the Form 5500 from the registration requirement. Because of this, we are no longer recommending that service providers register their staff in order to take advantage of the education grandfathering rule, because we believe, at this point, that it is more likely than not that the Form 5500 will be exempt.

Let me emphasize that we have not received anything official from the IRS, and it is certainly possible that they could change their mind again. If we sense anything different, we will let you know immediately. We also recognize that many of you incurred costs to register your staff and we are very mindful of that. We based that prior recommendation on what we were being told emphatically by the IRS at the time, namely that preparers of the Form 5500 would be subject to the registration requirements, and we wanted to make sure that people were in a position to take advantage of the grandfathering that applied to the educational requirements.

So, as you enjoy this time with friends and family it appears that this is at least one issue that you know longer have to be concerned about. Once again, Happy Holidays!

Brian Graff

Sent from my iPad

[GMK]

We also recognize that many of you incurred costs to register your staff

Should fee rebate requests be sent to the same address as the fee checks, or is that jumping the gun here?

[austin3515]

I processed mine last night, I'm tempted to dispute the charges

[Bill Presson]

We just processed 8 people on staff this week. Gotta love the IRS.

[movedon]

I would much rather this happened long ago (before I was arsed to get the stupid PTIN and waste my $30 or whatever the cost is after the deduction), but I think I'll resist the urge to gripe - I'm that happy for it to go away.