Frequently Asked Questions - Individual Tax Preparers
1. Where is a complete listing of those individuals exempt from Maryland registration? I have only really heard about exemptions through word of mouth, but I want to make sure I understand the whole picture.
The following professionals are exempt from the registration requirements:
- Actively licensed certified public accountants;
- IRS enrolled agents;
- Attorneys in good standing;
- Employees of state, local and federal government employees who perform tax return services in accordance with their official duties.
The list is taken directly from the Maryland statute, Business Occupations and Professions Article, Title 21-102(b).
2. I am a CPA, exempt from Maryland registration; however, I have several employees working for me who prepare Maryland tax returns. Do my employees fall under exemption number 5?
"an individual serving as an employee of or assistant to an individual tax preparer or an individual exempted under this subsection in the performance of official duties for the individual tax preparer or [the exempt individual]."
It depends to what extent the client recognizes the employee as his or her tax preparer. If the employee sits before the client and prepares substantially all of the return and the client identifies the employee as his or her tax preparer, then the employee must be registered. If the employee, rather, only acts as a receptionist or only gathers information in order to assign another tax preparer to a client, then that employee would fall under the exemption and need not register.
3. Does registration apply only to tax professionals physically processing a Maryland state tax return in Maryland, or does it pertain to the personal residence of the employer? For example, if I am a tax professional who resides in Maryland, but I work and process tax returns in the state of Delaware, do I have to register with the State of Maryland?
Maryland registration is not dependent on the preparer’s personal residence, but whether the preparer’s business includes preparing Maryland returns - either in state or out of state. If an out-of-state preparer is preparing Maryland returns as a significant part of his/her business, then he or she must register. However, those out-of-state tax professionals who prepare an occasional Maryland return for a walk-in client may not be required to register with Maryland.
The legal opinion from the Board’s counsel states:
"[T]he requirement for registration would depend on what professional contacts the individual has with Maryland that concern providing, attempting to provide, or offering to provide tax preparation services in Maryland. If preparing Maryland returns is a significant part of the individual’s business, and the individual has significant contacts with Maryland, then the Board would expect the individual to register with Maryland."
4. How and when does a tax professional receive his or her registration number upon submitting the registration fee?
The applicant must verify his or her PTIN number by submitting one of two supporting documents:
- The PTIN Application Confirmation screen from the electronic transaction that is used to apply for a federal PTIN. (Applicants should print this screen when it appears, because one cannot go back into the application to get it later.)
- The Welcome Letter received from the IRS subsequent to a PTIN Application Confirmation.
Once the Board receives (by mail, fax, or email attachment) the PTIN documentation, the Board’s administration releases the application, and the tax preparer receives his or her registration number and card in the mail, usually within 5-10 business days.
5. What are Maryland requirements for continuing professional education (CPE)?
The Board of Individual Tax Preparers requires registered tax preparers to complete, upon renewal (every two years), at least 16 hours of continuing education. Therefore, the two-year time period would run from the date of registration or renewal. Four of the 16 hours must be in Maryland state tax-related subjects. Two of the four Maryland hours may be satisfied by a federal or state course in ethics.