What Is IRS Competency Exam, and Why Do You Need It
The IRS Preparer Competency Exam covers the Form 1040 series and related schedule. It is intended to be a minimum competency exam. The IRS has announced that it expects the exam to be offered in October of 2011. The latest information indicates the exam may not be available until early November 2011.
Those who pass the exam and suitability and tax compliance checks will be able to use the designation Registered Tax Return Preparer. It should be noted that until all of the above steps have been completed, tax preparers should not use the new designation.
Thus far, the Internal Revenue Service has issued over 725,000 Preparer Tax Identification Numbers (PTIN). Of that number, approximately 62% of them have been issued as "provisional PTINs". The rest of the PTINs are considered to be "active PTINs". Active PTINs are currently held by CPAs, attorneys, or Enrolled Agents. All other PTINs are provisional.
Among the provisional PTIN holders, the only ones not required to take the tax preparer exam are those who either:
1) certify that they do not prepare or help prepare any of the Form 1040 series, or
2) are supervised employees (non-signing) who report to a CPA, attorney, or Enrolled Agent, and work in a firm owned by CPAs, attorneys, or Enrolled Agents.
All other provisional PTIN holders need to take the exam by December 31, 2013.
That means that hundreds of thousands of tax preparers will need to pass the preparer exam in the upcoming future. This is sure to cause some anxiety, but we at Tax Preparer Learning Systems, LLC are commited to helping our fellow tax preparers with the exam.
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