Why Use a Tax Preparation Course
Tax preparation courses can benefit tax preparers in multiple ways. Whether they lead to credentials or just continuing education credits, IRS-approved tax preparation courses may produce many opportunities for you in today’s industry. In this article, we will review the positives of these courses and discuss some details pertaining to them.
Completing some tax preparation courses can open the door for employment opportunities, depending on what companies are looking for in an employee. Some IRS-approved tax preparation courses can lead to specific credentials or continuing education credits that are highly praised in today’s tax industry.
Lawmakers decide to remove, update, and/or extend the tax code each year, bringing new challenges to the tax preparation industry. Even the most knowledgeable preparers still need some sort of education seasonally to make sure that these regulations are understood. Limiting yourself to your own understanding can be dangerous, and therefore a tax preparation course is always an opportunity for you to make sure you are understanding these changes.
Obtaining credentials, credits, or certifications in the field of tax preparation are not only desirable to an employer, but they can also be used in your marketing strategy. Millions of taxpayers file tax returns every year with a tax professional, and if you market yourself correctly, you may be just what they are looking for. The IRS has a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications that allows taxpayers to search for preparers that hold any of the following credentials:
- Attorney Credential
- Certified Public Accountant (CPA) Credential
- Enrolled Agent (EA) Credential
- Enrolled Actuary Credential
- Enrolled Retirement Plan Agent Credential
- Annual Filing Season Program (AFSP) Participant
Tax Preparer Requirements
According to the IRS, any tax professional with an IRS Preparer Tax Identification Number (PTIN) is authorized to prepare federal tax returns. However, tax professionals have differing levels of skills, education, and expertise. A significant difference in the types of practitioners is “representation rights.”
Here is guidance on each credential and qualification according to the IRS:
Unlimited Representation Rights
Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS. Tax professionals with these credentials may represent their clients on any matters including audits, payment/collection issues, and appeals.
Limited Representation Rights
Some preparers without one of the above credentials have limited practice rights. They may only represent clients whose tax returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees including the Taxpayer Advocate Service. These preparers cannot represent clients whose returns they did not prepare, and they cannot represent clients regarding appeals or collection issues even if they did prepare the tax return in question. Tax return preparers with limited representation rights include:
- Annual Filing Season Program Participants
- PTIN Holders
Certain States Require Hours
Types of Tax Prep Courses
IRS-approved tax preparation courses can come in multiple formats, different sizes, and have different costs associated with them. Depending on how you prefer to learn or obtain your continuing education, the IRS has multiples routes that you can go. These formats include, but are not limited to:
- Online/Virtual courses
- On-site testing (e.g., Special Enrollment Exam)
- In-person seminars
Each year the IRS has traditionally hosted three days of seminars at the IRS Nationwide Tax Forum with the latest from IRS leadership and experts in the industry. Recently, these events have been virtual due to the pandemic, but in years past these seminars have been in multiple cities around the country.
Courses that require payment can typically be paid for online to gain access to the course. The prices can vary depending on the package or course you are trying to complete. Some courses may be packaged with an event registration as well.
Believe it or not, you can find courses for free. The IRS typically offers multiple courses throughout the year for free that are CE accredited.
Today, online courses are the most popular way to earn CE credits, as compared to a classroom environment. Most of the major providers will offer online courses that can be easily tracked for reporting purposes.
How to know if a course is IRS approved
The IRS maintains an online database for their approved continuing education providers. This resource will display all the approved continuing education providers registered with the IRS and what courses they offer. The IRS continuing education provider site can be found at: https://www.ceprovider.us/public/default/listing.
The IRS offers many resources on continuing education for tax professionals that can be found at: https://www.irs.gov/tax-professionals/continuing-education-for-tax-professionals.
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