IRS Reveals Details of Voluntary Preparer Certification Program

On Thursday, the IRS announced that it will soon introduce a voluntary program for tax return preparers called the Annual Filing Season Program (IR-2014-75). This program will permit return preparers to obtain a record of completion when they voluntarily complete 18 hours of continuing education, including a six-hour refresher course for tax season, 10 hours of federal tax law topics, and two hours of ethics. All participants will also be required to consent to comply with the duties and requirements of Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10). The program will be in place for the 2015 filing season, but it will have a phased-in requirement of 11 hours of continuing education that must be completed in 2014.

Preparers who elect to participate will be listed in a directory on the IRS website beginning in January 2015. The database will also include practitioners with recognized credentials and higher qualifications, such as enrolled agents, attorneys, CPAs, enrolled retirement plan agents, and enrolled actuaries. The directory will not include tax preparers with preparer tax identification numbers who are not members of any of the above-listed groups of preparers.

The program guidance, which is expected to be released in the form of a revenue procedure, will also specify that only tax return preparers who have a record of participating in the program for that tax year will be able to represent their clients before the IRS during an examination of a return that they signed or prepared. (CPAs, attorneys, and enrolled agents continue to have unlimited representation rights.)

In announcing the program, the IRS referred to its unsuccessful effort to regulate tax return preparers, which was overturned by the federal courts in Loving, No. 13-5061 (D.C. Cir. 2/11/14), earlier this year. Before that decision, over 62,000 return preparers had passed the return preparer’s test, and the new program will exempt those preparers and other preparers who have passed recognized national and state tests from having to take the refresher portion of the voluntary course. The IRS stated that this program is an interim step to help taxpayers and encourage return preparers to pursue tax education. The Service said it will reassess the efficacy of the program in the future.

For coverage of the AICPA’s position on this new program, see “AICPA Reiterates Its Strong Concerns About IRS Voluntary Certification Program.”