IRS Tax Preparer Requirements

IRS Begins Scheduling Tax Preparer Competency Tests

The Internal Revenue Service is moving into the second phase of its tax preparer regulation initiative by beginning next week to schedule the first competency tests for tax preparers, reports Michel Cohn at Accounting Today. 

The IRS said Tuesday it is launching the new competency tests for Registered Tax Return Preparers as part of a larger initiative to increase its oversight of the tax prep industry. Last year, in the first phase of its efforts, the IRS required all paid tax return preparers to obtain a Preparer Tax Identification Number. Those tax return preparers who currently have a valid PTIN and are required to take the new test will have until Dec. 31, 2013, to pass the test. The third phase will involve continuing education.

Preparers who pass the test and meet other requirements will be given a new designation: Registered Tax Return Preparer. In order to maintain that designation, the individuals must renew their PTINs annually and complete 15 hours of continuing education each year. Enrolled agents, CPAs, and attorneys, among others, are exempt from the new testing and education requirements. These professional groups already meet more stringent guidelines to obtain their professional credentials

IRS Commissioner Doug Shulman

The fee for the test is $116.

“This is another major step forward in our effort to enhance tax preparation service to millions of taxpayers,” said IRS Commissioner Doug Shulman in a statement. “People should feel assured that the person they hire to prepare their federal tax returns has a working knowledge of the Tax Code. The majority of tax return preparers are reputable professionals, but the few bad apples cause great harm to taxpayers and the industry.”