Jun 9th 2011
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The Internal Revenue Service (IRS) has invited public comment on the content and administration of a registered tax return preparer competency exam scheduled to be offered beginning in October 2011. The examination will test competency required to prepare the Form 1040 series tax returns.
The competency test is the second phase of a three-phase paid tax preparer oversight program that the IRS inaugurated in 2010 after conducting a review of paid tax return preparers. During the first phase, beginning in September 2010, all paid tax return preparers were required to register with the IRS, obtain a Paid Tax Preparer Identification Number (PTIN) and pay a fee. Paid tax preparers are required to renew their PTINs each year.
Paid tax preparers who have obtained a PTIN and demonstrated competency on the exam will be permitted to call themselves an "IRS Registered Tax Return Preparer".
Attorneys, certified public accountants, and enrolled agents who are active and in good standing with their licensing agency, supervised preparers, and those who prepare no Form 1040 series returns will not be required to take the exam.
The IRS announced that it will develop the Form 1040 series competency exam with its selected vendor, Prometric Inc. The IRS is requesting comments in areas of the law from tax return preparers, associated industry and consumer groups and taxpayers, and on some administrative matters before they develop the exam. The administrative matters include:
- The format of the exam,
- The difficulty and length of the exam,
- How the results are reported to applicants,
- The annual time period for the update of the exam,
- The time period individuals should be required to wait prior to retaking the exam,
- The languages in which the exam should be offered, and
- The elements of the special enrollment examination that might be included, and any other information that should be considered for the development of the content and the administration of the exam.
The IRS expects to have the exam available in approximately October 2011. Individuals who register with the IRS and get their 2012 PTIN before the competency exam is available will have until the end of 2013 to take and pass the exam.
In the third phase of oversight program, tax return preparers who have passed the exam will be required to take 15 hours of continuing education courses annually. The start date for continuing education courses has not been determined. The same groups who are exempt from the competency exam will be exempt for the continuing education requirement.
Comments on the competency exam can be e-mailed to Notice.Comments@irscounsel.treas.gov
"Notice 2011-48" should be in the subject line of the e-mail message.
- Paid tax return preparers must obtain PTIN by January 1, 2011
- AICPA supports number ID and Circular 230 standards for all tax return preparers
- Congress asks the IRS to make changes to planned tax preparer regulations