July 25, 2016
 

Registered CPAs who are PTIN holders may have been contacted by the Internal Revenue Service (IRS) regarding their licensure status as an Illinois CPA. The ICPAS Government Relations office has fielded a number of inquiries from Registered CPAs who have received notices from the IRS.

Illinois has two licensure categories of CPAs.  A Registered CPA may use the designation “CPA” but may not perform the attest function including audits and reviews, cannot practice before the IRS, and does not have to fulfill 120 hours of continuing professional education (CPE) during the three-year registration cycle. A Licensed CPA can perform the attest function including audits and reviews, can practice before the IRS and must fulfill 120 hours of CPE, including 4 hours of ethics, during the three-year licensing cycle.

In 2007, the IRS notified Illinois regulators that it would not recognize Registered CPAs as CPAs with practice privileges under Circular 230. This notification came shortly after the amended Public Accounting Act created the Registered CPA as a transitionary title.

The Illinois CPA Society has informed our membership of the IRS limitation on Registered CPAs when state regulators received the 2007 IRS letter, and again at various times up until 2012 when the Registered CPA title closed to new applications.

Registered CPAs should be mindful that Circular 230 defines and regulates the practice before the Internal Revenue Service. IRS guidance prohibits a Registered CPA from signing “CPA” on federal tax returns. The Illinois Public Accounting Act that created the Registered CPA title does not preempt Circular 230 and IRS regulatory requirements with regards to requirements to practice before the IRS.

Registered CPAs who engage in tax preparation services should carefully review and respond to the IRS notice. Practitioners should also review the IRS guidance on the use of professional titles such as “CPA.” Registered CPAs should not sign federal tax returns with the CPA title unless they also hold the licensed CPA title.

In accordance with Circular 230 and Ill. Admin. Code Title 68 Sect. 1420.200 (Rules of Professional Conduct), practitioners have a professional responsibility to familiarize themselves with these regulatory practice requirements.