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Registered Tax Return Preparer (RTRP) Requirements
Tax return preparers that are compensated for federal tax returns will be subject to new requirements from the IRS beginning in 2011. The requirements include the following:
· Registration (in effect)
o This is required for everyone preparing tax returns
· Testing (Beginning in mid-2011)
o Registered tax preparers only. Attorneys, certified public accountants, and enrolled agents are exempt.
· Continuing Education (The beginning date has not been determined, 2011 is likely.)
o Registered tax preparers only. No additional education requirements imposed on Attorneys, certified public accountants, or enrolled agents.
Here is what you’ll be required to do…
First,
Sign Up with the IRS Online.
Paid federal tax return preparers may begin signing up for a PTIN in mid-September 2010. All tax return preparers, including those tax return preparers who are attorneys, certified public accountants, and enrolled agents, must have PTINs if they prepare tax returns starting on January 1, 2011. The online sign up form will be available at http://www.irs.gov/taxpros/. The IRS is assessing an annual fee of $64.25 for the PTIN registration.
Every single professional that preparers and files tax returns must pay the $64.25 fee annually and sign up for a PTIN using the new process even if you already have a Preparer Tax Identification Number (PTIN) number assigned from the IRS. If you already have a PTIN number, that number will stay the same.
Second,
Complete a Competency Exam. Registered
tax preparers only. Attorneys, certified public accountants, and
enrolled agents are exempt.
Paid federal tax return preparers must pass a competency exam to officially become a registered tax return preparer beginning in the middle of 2011. Registration is very important because if you already have your PTIN before the testing becomes available, you may have until December 31, 2013 to complete this exam and may take the test an unlimited number of times until you pass it. Once the competency exam has been released, you will not be assigned a PTIN by the IRS until you pass this test.
Attorneys, certified public accountants, and enrolled agents are exempt from the competency test requirement. Enrolled actuaries and enrolled retirement plan agents are exempt from the competency test requirement if they only prepare returns within the limited practice areas of these groups.
More guidance on testing will be available by the IRS in the spring of 2011, including the amount of the testing fee. Since Prometric already facilitates the exams for IRS Enrolled Agents it is very likely that they will administer the registered tax preparer competency exams for the IRS as well.
Competency exam study materials will
be available from a variety of providers, like
Finally,
Annual Continuing Education. Registered tax preparers only. Attorneys,
certified public accountants, and enrolled agents are exempt from this
new requirement.
A new continuing education requirement of 15 hours per year will also be implemented in the future, but the IRS has not published a timeframe for when this requirement will need to be met. Per the IRS, courses will need to include 3 hours of federal tax law updates, 2 hours of ethics, and 10 hours of other federal tax law. This will not apply to attorneys, certified public accountants, enrolled agents, enrolled actuaries, or enrolled retirement plan agents due to their existing education requirements.
Continuing education credit
opportunities will be available from a variety of approved content
providers, like
