Professional Tax Preparer Certification
The Internal Revenue Service requires tax preparers to pass a competency examination, complete annual continuing education and renew a Preparer Tax Identification Number (PTIN) each year. The exam and continuing education requirements do not apply to tax preparers who are attorneys, certified public accountants or IRS enrolled agents.
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Competency Exam and Standards
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The exam is intended to establish uniform competency among tax preparers. This includes testing for general knowledge of federal tax law and understanding of tax preparer standards of conduct.
IRS regulations require all tax preparers to follow practices that identify abusive tax avoidance activity. These procedures require tax professionals to conduct reasonable inquiry into taxpayer information that possibly understates income, according to IRS.gov.
Continuing Education and Ethics
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The continuing education requirement is 15 hours per year. Courses consist of three hours of federal tax law updates, two hours of ethics and 10 hours of general tax law.
Ethics requirements address tax preparer diligence relating to tax information that appears incorrect, inconsistent or incomplete. Tax preparers also must comply with ethical standards for written tax advice to avoid reliance on incorrect assumptions or representations, failure to consider all relevant facts or failure to analyze important legal issues.
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PTIN and Fee
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Tax return preparers must obtain a PTIN under the registration system implemented in 2010 and pay the applicable fee. The PTIN is renewed annually.
Preparers possessing PTINs before competency testing becomes available in 2011 have until December 31, 2013, to pass the exam. After testing is implemented, new tax preparers are required to pass the examination before obtaining a PTIN, which is necessary to begin practice as a paid tax preparer.
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References
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
