Cameron Miranda
Tax preparers are in high demand, and while the process of becoming one is straightforward, there are a few key steps to follow. First, you'll need to take a course to receive certification, which will teach you the ins and outs of tax laws and preparation. Next, you'll need access to tax preparation software and obtain a Preparer Tax Identification Number (PTIN) from the IRS. To gain unlimited representation rights, you must earn certification as an Enrolled Agent (EA), Certified Public Accountant (CPA), or attorney. CPAs are licensed by state boards and must pass the Uniform CPA Examination, while EAs are licensed by the IRS and must pass a three-part Special Enrollment Examination. Tax attorneys must complete law school and pass a state-level bar exam.
| Characteristics | Values |
|---|---|
| Certification | Certified Public Accountant (CPA), Enrolled Agent (EA), Attorney, Annual Filing Season Program (AFSP) |
| Requirements | Varying levels of education, experience, and examinations |
| Rights | Limited or Unlimited Representation Rights |
| Skills | Strong grasp of algebra, communication skills, customer service skills |
| Knowledge | Tax laws, tax preparation software, IRS changes and technical corrections |
| Credentials | IRS Preparer Tax Identification Number (PTIN), EFIN, Digital Certificate of Completion |
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What You'll Learn
Enrolled Agents (EAs)
To become an EA, an applicant must obtain a Preparer Tax Identification Number (PTIN) from the IRS and pass all three parts of the Special Enrollment Examination (SEE). The SEE is a comprehensive exam that requires proficiency in federal tax planning, individual and business tax return preparation, and representation. Alternatively, an applicant can become an EA through an experience-based path, which requires a minimum of five years of experience working for the IRS in any capacity that involves interpreting taxation statutes.
Once licensed, EAs are subject to renewal periods based on the last digit of their Social Security Number (SSN) or tax identification number. To qualify for renewal, they must complete 72 hours of continuing professional education (CPE) every three years, including two hours of ethics or professional conduct in each of the three years.
The EA designation is the highest credential awarded by the IRS, and there are approximately 87,000 practicing EAs in the United States. The position of EA was created in response to fraudulent war loss claims after the American Civil War, with roots tracing back to the "Horse Act of 1884."
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Certified Public Accountants (CPAs)
CPAs are licensed by state boards of accountancy, the District of Columbia, and US territories. To obtain a license, individuals must meet specific education, examination, and experience requirements set by these boards. This typically includes post-secondary education with a focus on accounting and at least one year (1,800-2,000 hours) of professional experience in the field. CPAs must also demonstrate good character and comply with ethical standards.
In terms of tax preparation credentials, CPAs hold unlimited representation rights. This means they can represent clients before the Internal Revenue Service (IRS) without restriction. To legally prepare tax returns for compensation, CPAs, like other tax professionals, must obtain an IRS-issued Preparer Tax Identification Number (PTIN). This number must be entered on the tax returns submitted to the IRS.
CPAs are well-versed in tax laws and can provide authoritative competence to taxpayers seeking assistance with their annual tax filings. They can work as tax advisors or financial advisors, offering advice and guidance to their clients. CPAs are also equipped to handle more complex tasks, such as audits and appeals, for their clients.
Overall, Certified Public Accountants (CPAs) possess the necessary certification, knowledge, and expertise to effectively assist individuals and businesses with their tax-related needs. Their certification and qualifications enable them to provide valuable services in the realm of tax preparation and planning.
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Attorneys
Tax attorneys are authorized to represent clients before the IRS. They can provide legal advice on tax compliance and strategies to avoid legal issues, as well as counsel in tax litigation, estate planning, and corporate tax issues. Attorneys are one of only three tax certifications that grant unrestricted authority to represent clients before the IRS. The other two are Enrolled Agents (EAs) and Certified Public Accountants (CPAs).
In California, attorneys who are members of the California State Bar are exempt from registering with the California Tax Education Council (CTEC) to prepare tax returns. However, they must renew their registration annually and pay a fee to legally prepare income tax returns.
To work as a tax professional, a PTIN is required. However, this is not a license to prepare tax returns, and one must complete the enrolled agent, CPA, or tax attorney process to become a tax representative. Attorneys with current professional status information must provide this when applying to become an authorized IRS e-file provider.
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Annual Filing Season Program
The Annual Filing Season Program (AFSP) is a voluntary IRS program that recognizes the efforts of non-credentialed tax preparers who aspire to a higher level of professionalism. It is designed to encourage education and filing season readiness. The program grants limited representation rights to its participants, meaning they can represent clients whose returns they have prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service.
To obtain an AFSP Record of Completion, participants must obtain 15-18 hours of continuing education each year, including a six-hour federal tax law refresher course with a test. This refresher course must be completed by all participants except those who have passed the Registered Tax Return Preparer test or certain other recognized national and state tests. The remaining hours can be completed through annual filing season program online courses.
Upon completion of these requirements, participants receive an Annual Filing Season Program Record of Completion from the IRS and are included in a public database of return preparers on the IRS website. This record demonstrates to clients that the tax preparer is a true and reliable professional who is committed to staying up-to-date on current tax laws.
To maintain their AFSP certification, participants must obtain continuing education credits each year. This can be done by completing IRS-approved continuing education hours, after which the participant's education provider reports those hours to the IRS along with their PTIN. Once the PTIN renewal season starts each October, the IRS reviews the information and, assuming the required education hours have been completed and the PTIN is active, generates an AFSP Record of Completion for the participant.
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National Tax Practice Institute (NTPI) Fellow certification
The National Tax Practice Institute (NTPI) is a three-level program designed to prepare tax professionals for a career in tax representation. The program is open only to enrolled agents, CPAs, and tax attorneys. Each level of the curriculum enables participants to expand their knowledge and skills and gain the confidence needed to guide their clients through IRS codes, internal regulations, and agency structure.
To become an NTPI Fellow, one must complete all three levels of the program. NTPI Level 1 includes 24 CE credits with a focus on representation. Participants can choose to take the course virtually or in person. Level 1 teaches participants how to review IRS transcripts and case data to find the best resolution method. It also covers how to get people with unfiled tax returns back into compliance, how to deal with notices about underreported income, and how to set up payment plans. Level 2 is available online or in person, while Level 3 can be completed online or in-person in Washington, DC.
Most people take several years to complete all three levels and become a fellow. After becoming a fellow, individuals often continue their education by taking graduate-level courses. NTPI Fellows exceed the IRS's minimum standard for continuing education and are dedicated to staying up-to-date with changes to the tax code.
Benefits of becoming an NTPI Fellow include exclusive access to webinars, annual grad courses, and networking opportunities.
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Frequently asked questions
To become a certified tax preparer, you must complete professional development courses and pass a test with the IRS to receive your PTIN (Preparer Tax Identification Number). This will allow you to complete and submit tax returns on behalf of your clients.
Tax preparers with limited representation rights require no license or certification. They can only work with clients whose tax returns they have personally completed and signed. On the other hand, tax preparers with unlimited representation rights can take on new clients regardless of who signed their tax returns. These professionals can also handle audits and appeals for their clients. To hold unlimited representation rights, tax preparers must be certified as EAs (Enrolled Agents), CPAs (Certified Public Accountants), or attorneys.
To become an EA, you must pass the three-part Special Enrollment Exam (SEE) issued by the IRS and undergo a suitability check, which may include a credit check, a tax compliance check, and a criminal background check. Alternatively, you can become an EA through an experience-based path, which requires a minimum of five years of experience working for the IRS in any capacity involving the interpretation of taxation statutes.
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