Related Topics:

Individual Income Tax
Tax Professionals

On May 16, 2019, Governor Kim Reynolds signed “House File 590, an Act relating to tax return preparers, and providing penalties,” into law. Rules related to the tax return preparers regulations can be found in Iowa Administrative rule 701–7.36. This guidance pertains, generally, to the calendar years beginning on or after January 1, 2020 and highlights tax return preparers’ continuing education and preparer tax identification number (PTIN) requirements mandated in House File 590.

House File 590 requires tax return preparers to complete a minimum of 15 hours of continuing education courses each year. At least 2 hours must pertain to professional ethics and the rest must relate to federal or state income tax. Excess hours completed in one calendar year will not roll over to the next calendar year. Each course must be taken from an Internal Revenue Service (IRS) approved provider of continuing education. Courses may be in person, online, or self-study, as long as they are offered by an IRS approved provider and pertain to federal or state income tax or professional ethics. A number of these IRS approved providers are located in Iowa, but it is not mandatory that a continuing education course be taken from an Iowa provider.

House File 590 also requires tax return preparers to include their PTIN, as defined in Internal Revenue Service Notice 2011-6, on all of the following Iowa tax returns they prepare, regardless of the year of the return: IA 1040, IA 1040X, IA 1040C, IA 1041, IA 1120, IA 1120X, IA 1120F, IA 1120S, and IA 1065. Violators of this provision will incur a $50 civil penalty for each violation (not to exceed $25,000 in any calendar year), unless the tax return preparer shows that the failure was reasonable under the circumstances and not willful or reckless conduct.