Registered Tax Return Preparer Competency Test Information

The tax preparation industry has experienced many changes in the past couple of years, including the requirement for competency testing as a provision of tax preparer regulation. According to the IRS, the return preparer competency test will be released late in 2011. Passing this test is a requirement for certain tax return preparers. Some tax preparers are not required to take the competency exam, including attorneys, certified public accountants, enrolled agents, certain supervised preparers, and individuals who do not prepare Form 1040 series returns.

 In order to register for the test, you must have a Personal Tax Identification Number (PTIN). To obtain a PTIN, Create an Online PTIN account with the IRS. PTINs will be renewed on a calendar year basis; renewal is required by December 31 each year. Preparers who already have a provisional (PTIN) have until December 31, 2013 to pass the competency exam. The test can be scheduled directly from the preparer’s online PTIN account.

The test will be a combination of multiple-choice and true or false format and will consist of approximately 120 questions. Questions will be weighted and individuals will receive a pass or fail score, with diagnostic feedback provided for those who fail. The time limit for the test is anticipated to be between two and three hours. The fee for the test is expected to be between $100 and $125, which is separate from the PTIN registration or renewal fees. Currently, there is no limit to the number of times the test can be taken; however, you must pay the fee each time.

 To assist in test preparation, a list of study materials has been recommended by the IRS. This list reflects information of what the test candidate - can expect to see on the exam.

 Beginning on January 1, 2012, Registered Tax Return Preparers will be required to complete 15 hours of continuing education (CE) credits from IRS approved providers. The 15 hours will consist of 2 hours of ethics/professional conduct, 3 hours of federal tax law updates and 10 hours of federal tax law topics.

 For test specifications and to view a summary of the return preparer requirements, visit http://www.irs.gov/taxpros/article/0,,id=243833,00.html.

By: Lori Correa
        Drake Software Education