If you are interested in becoming a certified tax preparer, you should know that in addition to training tax preparer certification is now required. This was not always the case, getting a tax preparer license was a fairly easy process prior to 2011. Before this time, tax preparers were not required to be certified by the IRS in order to charge for their services unless you lived in California or Oregon. Basically you could complete any of the accounting certificate programs, get your license and be on your way to earning a decent tax preparer salary.
Tax Preparer Certification: Why is it Necessary?
The reason for the change is that the IRS has discovered that there was a huge gap in the way tax returns were being prepared. Tax preparer certification will level the playing field and also add a measure of protection for the consumer. There have been a growing number of complaints from consumers about unethical behavior and not maintaining accurate records.
This change will not have any impact on the Certified Public Accounts, Attorneys and Enrolled Agents who are exempted from the IRS license requirements. For the most part for these professionals it will be business as usual: they are already bound by specific IRS regulations contained in the IRS Circular for Tax Preparers.
Tax preparer certification notwithstanding, this document should be read and understood by seasonal tax preparers in particular and in general by everyone who must deal with the IRS for any reason. This document clearly lays out the rules as well as what the IRS expects from tax preparers when they manage clients or interact
with the IRS.
Without tax preparer certification many seasonal tax preparers will be out of work when these regulations go into effect and bring another step to the process of getting a job for novice tax preparers. The full details and supporting documentation about testing will be published on the IRS website.
What is the Impact of Tax Preparer Certification?
Although most consider the tax preparer certification a good move, it’s not clear how much of a difference this new regulation will make in terms of earnings, the number of tax preparers available to the public or industry performance. It could bring extra earnings to the tax preparers who already used a Preparer Tax Identification Number (PTIN).
This new requirement for tax preparer certification will not cause Oregon or California to change their requirements for obtaining a state license. Currently to receive a license from the California Tax Education Council an individual must maintain a $5,000 preparer bond, take 20 hours a year of continuing education and complete a 60 hour course.
In the state of Oregon things are a bit different, there are 2 license types: Licensed Tax Consultant and Licensed Tax Preparer. To receive either of these licenses, individuals must complete a basic 80 hour tax course and pass a rigorous exam. Individuals in these states will have their hands full in terms of complying with the new IRS rules. They will have to keep up with both the State requirements for tax preparer certification as well as those from the IRS.
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