Tax School 101: How to Become an IRS Registered Tax Return Preparer (RTRP)

What is a Tax Preparer?

The Internal Revenue services defines a "tax preparer" as "an individual who, for compensation, prepares all or substantially all of a federal tax return or claim for refund.

What are the recent changes to become an IRS Registered Tax Return Preparer (RTRP)?

The IRS requires all paid tax preparers to sign up with the IRS, pay a registration fee and obtain a preparer tax identification number (PTIN). If you already have a PTIN you must still sign up under the new process. All paid preparers will be required to register and obtain a PTIN before testing becomes available (mid-Fall 2011), or they cannot prepare returns for compensation.

Beginning October 2011, tax preparers must pass an IRS Competency Exam to officially become an IRS Registered Tax Return Preparer. Individuals who have PTINs before testing becomes available will have until December 31, 2013 to pass the IRS Competency Test and may take the test an unlimited number of times to pass it. There will be a fee to take the test and that fee will be due each time the individual attempts to pass the test. After testing becomes available, new tax return preparers will be required to pass the IRS Competency Test before they can obtain a PTIN. The IRS will require competency tests for all paid tax return preparers (except Attorneys, CPA's, Enrolled Agents). The IRS will be phasing in three tests as follows: Year 1 - Wage and Non Business, Year 2 - Wage and Small Business, Year 3 - Business Tax Rules. All preparers who register prior to the competency test being available (October 2011), will have three years, until December 31, 2013, to pass a competency test.

What are the fees to obtain a PTIN?

The IRS has an online registration system, paid Tax Return Preparers pay a $64.25 user fee the first year for a PTIN.

What is the difference between and Enrolled Agent and an IRS Registered Tax Return Preparer?

The practice of the IRS Registered Tax Return Preparer will be limited to preparing tax returns for compensation and representing taxpayers in Examination when the return under examination was a return that they prepared whereas the practice of Enrolled Agents before the IRS will not be limited.

How do I become an IRS Registered Tax Return Preparer?

To become a Tax Preparer in California and Oregon you must follow the state guidelines as well as the Internal Revenue guidelines. The state of California requires all paid Tax Preparers to take a the California Registered Tax Preparer Course - 60 hour Qualifying course and to be register with the California Tax Educational Council (CTEC). In addition to the state requirements, the Internal Revenue services requires an annual IRS Competency Exam. This is expected to start in October 2011. Once an individual possesses a valid PTIN and passes an IRS Competency Test, they will become an IRS Registered Tax Return Preparer.

How do I keep my registration current?

The IRS will require tax preparer continuing professional education of 15 hours per year to further your tax preparer training for all paid Tax Preparers (except Attorneys, CPA's, Enrolled Agents). The IRS will require the 15 hours to include three hours of federal tax law updates, two hours of tax preparers ethics and 10 hours of federal tax law topics. Although, there is no continuing professional education requirement (CPE) for 2011.The IRS continuing professional education (CPE) requirement will begin in 2012. Individuals who are Registered Tax Return Preparers, and those who have provisional PTINs but have until December 31, 2013 to pass the test, will need to obtain 15 hours of continuing education courses from IRS approved providers during calendar year 2012 and each subsequent year.

How there any other requirements?

Yes, the IRS may conduct fingerprint checks on some applicants in the future. All applicants currently must include an explanation of any felony convictions in the past 10 years, when apply for a PTIN.

Lauren Zago is the owner of PlatinumProStudies.com, a leader in tax and notary education. Platinum has been providing educational services for tax and notary professionals since 1995 and take great pride in providing extraordinary customer service. We are committed to offering you the best in education and being there for you every step of the way. Platinum recently announced a free IRS Tax Preparer Training to an individuals to help pass the IRS Competency Exam.