IRS Urges Tax Preparers to Take Competency Tests ASAP
The Internal Revenue
Service is encouraging tax preparers to take a new competency exam as soon as
possible.
To date, over 4,800 people have
become Registered Tax Return Preparers, according to the IRS. The IRS is urging
an estimated 340,000 preparers required to take the test to do so as soon as
possible so they will have more time if they need to retake the test and to
avoid a potential flood of last-minute test takers.
CPAs, Enrolled Agents and
attorneys are exempt from the test because they already have other testing
requirements as part of their credentials. Certain non-signing preparers
supervised by CPAs, EAs or attorneys are exempt, as are non-1040 preparers.
The RTRP
competency test is currently available at more than 260 vendor testing centers
nationwide. Preparers can determine if they have a test requirement by going to
their online PTIN Account at www.irs.gov/ptin. Preparers also can set a test
date, time and location through their online PTIN account.
The IRS began taking its first
steps three years ago to putting in place a regulatory regime for paid tax
preparers, including registration, testing and continuing education
requirements.
On June 4, 2009, IRS
Commissioner Doug Shulman launched a six-month review focusing on the
competency and conduct of paid tax return preparers. The review resulted from a
recognition that paid tax return preparers were an important element in the
integrity of the nation’s tax system.
The review included a series of
public hearings with the tax preparation community, consumer advocates,
oversight groups and taxpayers. Six months later, the Return Preparer Review
laid out a series of recommendations to extend oversight to certain areas of
the preparer industry to enhance tax compliance and service to taxpayers.
Among the initiative
highlights:
Mandatory
registration and use of a Preparer Tax Identification Number: Anyone who is paid to prepare, or help
prepare, all or substantially all of a federal tax return now has to register
with the IRS and obtain a PTIN, as do all enrolled agents. The PTIN is valid
for a calendar year and must be renewed annually. Nearly 850,000 preparers have
registered for a PTIN since the requirement began.
Competency
Test: In
November 2011, a 120-question basic competency test was launched. Certain
preparers are required to take the test by Dec. 31, 2013, to stay in business.
Continuing
Education: The
roughly 340,000 preparers who have a testing requirement also have a new
requirement to complete 15 hours of continuing education courses each year. The
CE credits must include 10 hours in federal tax law, three hours in federal tax
law changes and two hours in ethics. This requirement became effective in
January 2012 and it applies even if the preparer has not yet taken the test.
There are now hundreds of outlets offering IRS-approved CE courses. More
details are available at www.irs.gov/taxpros/ce.
Ethics
and Tax Compliance: Ethical
requirements that previously applied only to CPAs, EAs and attorneys now apply
to all paid return preparers. All paid preparers also will undergo a tax
compliance check and are subject to the standards for practice outlined in
Treasury Department Circular 230.
Registered
Tax Return Preparer: Preparers
who pass the competency test and tax compliance check are given a new
credential: Registered Tax Return Preparer. To date, over 4,800 people have
become Registered Tax Return Preparers. Beginning in 2014, only
Registered Tax Return Preparers, Enrolled Agents, CPAs, and attorneys will be
authorized to prepare individual income tax returns for compensation.
Public
Database: The IRS
also plans to create a publicly searchable database that will allow taxpayers
to see if their tax preparers have met IRS standards or to find a tax preparer
in their zip code area. The IRS will have a public education campaign to inform
taxpayers to use only CPAs, EAs, attorneys or Registered Tax Return Preparers
if they pay to have their taxes prepared.
The database will also show any
credentials held by the preparer, including the new RTRP credential, as well as
those who are EAs, CPAs and attorneys.
More information about the competency test, its topics, a tutorial and
list of study materials is available at www.irs.gov/taxpros/tests and select RTRP test.www.Tax2290.com provides a streamlined user friendly online website for filing Heavy Vehicle Use Tax, IRS Form 2290. It has many unique features for your convenience and offers seasonal pricing for your benefits. It also provides a special interface for Tax Professionals.
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