The regulation of paid tax professionals by the IRS has entered a new phase in 2012. With few exceptions, working in the tax business during the past two years required you to possess a Preparer Tax Identification Number. When renewing your PTIN for 2013, you need to complete tax continuing education requirements by December 31, 2012.
The process this year is self-certification using an honor system. You must acknowledge that you have completed tax preparer CE or will do so by the year-end deadline. The education mandate of 15 hours annually specifies topics of instruction. Updates to federal tax laws must comprise 3 hours. Another 2 hours covers ethics. The remaining 10 hours may address any other areas of federal tax law.
The requirements are the same regardless of whether you have passed the RTRP test, which permits you to use the designation of Registered Tax Return Preparer. You still have until December 31, 2013 to pass this competency exam. However, because of the many tax professionals who completed the exam in 2012, possessing RTRP certification could embody a competitive advantage for the upcoming tax season.
The IRS sent 312,000 letters this autumn to tax professionals reminding them about the competency exam. The RTRP test has been administered for about one year at Prometric exam sites. If you are delaying this testing process, time is running out for further procrastination. Seating is limited at Prometric centers, where other professional exams are also offered. After tax season, a few months is not very long to test over 300,000 Registered Tax Return Preparers. Don’t expect to find many scheduling slots available on weekends.
Starting January 1, 2014, all paid tax preparers who require a PTIN must pass the exam for Registered Tax Return Preparers, unless they are Enrolled Agents, CPAs, or attorneys. Certain individuals employed in the income tax industry are exempt from needing a PTIN because they work under the supervision of a licensed tax professional. For everyone else, PTIN renewal next year requires both passing the examination plus meeting the annual CPE requirements.
The 15 hours of tax CPE courses overlap with any similar education completed when you have RTRP certification plus you’re an Enrolled Agent, CPA, or attorney. For example, Enrolled Agents have 72 hours of CPE every three years. Taking at least 15 of those hours each year counts toward the RTRP requirement. Members of the National Association of Enrolled Agents already surpass this standard because their membership necessitates 30 hours of CE annually.
No requirement exists at this time to upload evidence of completed education. However, the IRS is entitled to investigate anyone with a PTIN. In fact, the IRS could make a future request for supporting documentation of tax courses mandated for this year. Since you must certify that you have satisfied or will satisfy the education standards, severe penalty is the likely result if you are caught misrepresenting your qualifications. Plenty of time remains this year to finish an online CPE course for tax professionals. Sparing 15 hours is usually very easy in the tax industry during December. So, if you waited until this slow time of year, make sure you fulfill your tax education requirement as a holiday gift to yourself.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.