Registered Preparer Continuing Education Requirements

Registered Preparer Continuing Education Requirements

The IRS is making sweeping changes in the tax preparation industry in order to ensure that only qualified individuals serve the public. Preparers will now have to obtain a Preparer Tax Identification Number (PTIN), accrue a certain amount of continuing professional education (CPE) and pay the annual $64.25 fee. Registration Guidelines Every individual that would like process tax returns after December 30, 2010, will need to obtain a PTIN. The requirement is all encompassing, so it applies to employees of tax preparing businesses as well. For those that already have a PTIN, registration into the new IRS system is still required in order renew the number. Registration capabilities are expected to begin in the middle of September 2010. Competency Testing Competency testing must be completed (and successfully passed) in order to receive a PTIN. It provides an individual the ability to complete Form 1040 series returns. Two different tests will need to be taken within 3 years, which will cover: Wage & Non Business 1040 Wage and Small Business 1040 (Schedules C, E, F and related forms) The exams are scheduled to be available in the middle of 2011. In the future, the IRS plans to have additional testing and instructions for other forms. At this time, the IRS has not yet determined the mandatory passing score for the competency testing. Other details, such as the components of the exam, testing procedures, locations and the applicable fee have not yet been established either. However, a registrant will have the ability to take the test an unlimited number of times. Any person that does not complete this requirement within the designated period will have their PTIN deactivated and will be taken off the list of registered preparers. Continuing Professional Education CPE Each PTIN holder will need to complete 15 hours of tax CPE in order to maintain his or her registration in the IRS public database. It is important to note that tax preparers should wait until January 1, 2011 to begin accruing their CPE credits, as any tax courses taken before this date will be ineligible to meet the IRS requirement. The curriculum must consist of 10 hours of Federal Tax Law, 3 hours of Tax Changes/Updates and 2 hours of Ethics CPE. Exceptions An exception to the mandatory testing exists for attorneys, enrolled agents and CPAs (enrolled actuaries and enrolled retirement plan agents are included only if their tax preparations are within their limited practice area). It is important to note that if one of these types of practitioners is not active and in good standing, then they will be subject to competency testing. To qualify for an exemption to the CPE requirement, a tax return preparer must be an attorney, CPA, enrolled actuary or enrolled retirement plan agent. Registered or licensed public accountants in certain states are deemed to hold the same rights as a CPA and do not have to take the exam or meet the CPE requirements.

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