COLUMBUS, Ohio ― The Internal Revenue Service today urged 10,000 Ohio tax return preparers to immediately schedule their competency test or risk difficulty finding a date, time or location as the exam deadline nears next year. For most, the appropriate test will be the Registered Tax Return Preparer (RTRP) competency test.
The RTRP test has been available since November 2011. Nationwide, more than 310,000 tax return preparers still need to pass the test before Dec. 31, 2013. Tax professionals who are Enrolled Agents (EAs), Certified Public Accountants (CPAs), and attorneys are exempt from the test, as are certain non-signing preparers and those who do not prepare the Form 1040 series.
The RTRP test is being administered by Prometric, Inc., which has 260 testing sites nationwide, to include sites in metropolitan Cincinnati, Cleveland, Columbus, Akron, Dayton, Toledo and Youngstown. However, if too many preparers delay, available seats will be scarce.
The test is one phase of a multi-year effort by the IRS to increase oversight of the tax professional industry and help ensure minimal competency levels among those who are paid tax return preparers. More than 60 percent of taxpayers use a tax preparer. Under the new rules, all professional tax return preparers must register with the IRS, obtain a Preparer Tax Identification Number (PTIN), and adhere to ethical standards.
Certain preparers must also pass the new test and complete 15 hours of continuing education each year. For these preparers the IRS created a new credential: Registered Tax Return Preparer. Starting Jan. 1, 2014, only Registered Tax Return Preparers, EAs, CPAs and attorneys will be authorized to prepare and sign individual tax returns.
There are nearly 25,000 return preparers from Ohio who have obtained PTINs from the IRS. To date, about 630 Ohio preparers have taken the test and become credentialed Registered Tax Return Preparers. About 14,400 of the remaining 24,000-plus PTIN-holding return preparers are tax professionals who are exempt from the test, leaving some 10,000 who must still pass the RTRP test.
The test is a 2 ½ hour, timed exam. It must be taken at a Prometric site for control purposes. There are 120 questions which cover Form 1040 tax preparation issues, individual tax law issues and ethics. Preparers must pay $116 fee for the exam. CPAs, EAs and attorneys already must pass tests for their credentials.
“This is another step in the process of registering and ensuring the competency of tax return preparers,” said Jennifer Jenkins, IRS media relations spokesperson for Ohio. “Currently, all tax return preparers are required to obtain and regularly renew their PTIN, plus earn continuing education credits. Effective Jan. 1, 2014, return preparers will be required to have passed an IRS competency test or the testing required for CPAs or attorneys. Return preparers who do not pass the appropriate test will not be permitted to prepare returns as of Jan. 1, 2014.”
Next year, the IRS will launch a public listing for taxpayers and others to confirm preparers with professional credentials and valid PTINs.
To learn more about the test or to begin the scheduling process, preparers should go to www.irs.gov/taxpros/tests.