Illinois to Reinterpret Out-of-State CPA Regulations

Illinois to Reinterpret Out-of-State CPA Regulations

Illinois state regulators have stated that, effective Oct. 1, 2006, they will interpret a new state law as requiring non-Illinois CPAs performing accounting work in the state to have an Illinois license or otherwise be registered with the state.

“Illinois regulators are saying that if an out-of-state CPA signs an Illinois tax return with the CPA initials after his or her name, that constitutes ‘holding out as a CPA’ in Illinois and therefore would require either a license, a registration or a temporary permit,” stated Elaine Weiss, president and chief executive officer of the Illinois CPA Society (ICPAS).

However, merely filing a tax return in Illinois does not require a CPA license.

“No one needs a CPA license to file a tax return in Illinois. You just can’t hold yourself out as a CPA without being licensed or registered,” said Tom Wetzler, vice president of government relations at ICPAS.

Wetzler said he has received many questions recently from out-of-state CPAs regarding the forthcoming October 2006 rule change and that there has been a lot of confusion about how the new rules will be applied.

“We’re working with state regulators to clarify the situation,” he said. “Hopefully, we will be able to get them to adopt a less restrictive definition of what constitutes ‘holding out as a CPA.’”

Wetzler suggested that after the rule change takes effect, out-of-state CPAs could opt to omit the “CPA” initials from tax return filings, provided that such an omission is legal in the original state of licensure. Illinois does not require its CPAs to use the initials for tax-preparation purposes, he said.

“If your own state requires you to include the CPA designation when you sign as a preparer, your best bet is to get registered in Illinois. Registration costs $90, doesn’t require any CPE and is good for three years,” Wetzler said.

According to Michael Bucci, a spokesperson for the New York State Department of Taxation and Finance, CPAs in New York do not have to use the “CPA” initials when preparing a tax return.

“There is no requirement in the state of New York that a CPA who prepares a tax return put the letters ‘CPA’ on the return or identify himself or herself as such,” Bucci explained.