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Tax preparer low scale - acts as a sole proprietorship

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Level 1

Hey,
I'm new to tax return preparation after 8 years at the one of the big4 assurance departments. I want to start doing tax returns for friends and relatives for moneys (very limited). As of now I have 4 potential client in 2020. I want to start as sole proprietorship. I registered and received a PTIN. I have read that I don't need a EFIN as long as I don't exceed the 11 tax return threshold a year (in 2020). I file tax return for foreigners (federal tax returns only - no state). 

My question is - 
what should I place as Firm's name and EIN? leave it blank? I'm not associated in any sort of a business (act as a sole proprietorship). 

Thank you,

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7 Replies 7
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Level 15

But you do need an EFIN if you plan on e-filing any of those 4 returns.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
Highlighted
Level 1

Hello,

Thanks for the comment.
According to the Publication 3112:
'Most Tax Return Preparers Must Use IRS e-file
Any tax return preparer who anticipates preparing and filing 11 or more Forms 1040 and/or 1041 during a calendar year generally must use IRS e-file.

I do not anticipate preparing and filing 11 1040 forms.

 

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Level 15

That's fine as long as you are planning on paper filing the up to ten returns that you prepare.  If you have a desire to e-file even one of them, you will need an EFIN.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
Highlighted
Level 1

Thank you. I have no such desire - although it is not super convenient I will do all paper filling. For 2020 I will register for EFIN.

And as for my question - what do I fill out under the firm's name and EIN on my client's 1040? leave it blank?

Thanks, 

0 Cheers
Highlighted
Level 12

"what should I place as Firm's name and EIN?"

If you don't apply for and receive an EIN, you will be giving out your SSN.

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"Level Up" is a gaming function, not a real life function.
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Level 15

Firm name will be your name.


ex-AllStar
Highlighted
Level 15

Will your friends and family be OK with their paper returns siting in one of the trailers holding 10 million pieces of mail that will take months for the IRS to open and process?

I am not optimistic that it will be business as usual next tax season.

I recommend efiling even if you are not required to efile.


ex-AllStar