Playing Chicken With a Career

Earlier this month, the IRS sent out 312,000 letters to tax pros with PTINs reminding them of the need to pass the minimum competency exam by Dec. 31, 2013. This is a reminder the Service has been making all year. Currently, a tax pro can get a provisional Preparer Tax Identification Number (PTIN) first and take the test later. Starting Jan. 1, 2014, however, the test must be passed before a PTIN is issued. Anyone with a provisional PTIN who hasn’t passed the test Dec. 31, 2012 will lose their PTIN and be unable to prepare tax returns until the test is passed and a PTIN is issued.

The RTRP test is being administered by Prometic at their exam sites around the county. While Prometic has about 270 sites offering the RTRP test, there is concern that tax preparers will find it harder to book a testing time the closer it gets to the deadline. The IRS has repeatedly said that they will not extend the December 31, 2013 date. 14 months to test 312,000 preparers may seem plenty of time, once you pull weekends and holidays out of the time, add preparers who have to retake the test, factor in tax season, that Prometric also offers other tests limiting the seating available for the RTRP, you can see why the IRS is concerned. Procrastinating tax pros may find they can’t get a testing time at the last minute.

So, why are so many people putting off the test? I am sure part is plain procrastination. Fear of testing is a rational I’ve heard a lot. And waiting to hear from colleagues about the test is a logical reason to wait. But I wonder how many people are holding off to see if the test goes away or the IRS extends the testing time. How many tax pro are holding off to see if the IRS changes their mind about the testing?

After all, who want to spend the time and money on the test if there’s a chance the program will be stopped? Commission Shulman’s five year term ends November 9th and a new IRS Commissioner will be taking over. It could be that the new commissioner would put the program on hold to review it for themselves. And who knows what the election will bring? It’s possible that a change in Administration or Congress might affect the tax preparer licensing program. Even if there is no change to the licensing program, it seems to me that a lot of preparers are playing a game of Chicken with the IRS. They’re thinking that if enough tax pros procrastinate the IRS will have no choice but to extend the testing period to keep tax return filing going. They point to previous delays. But those delays were because the IRS didn’t have the programs running. They were not because of tax pro procrastination.

There is a chance that licensing will magically go away or the IRS will extend the testing deadline for provisional PTINs. But are the small chances either will happen worth playing chicken with a career, even for a year? Even for a few months?

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Comments

[Mike M]

The annual PTIN license renewal seems to be a little too frequent. They could easily make it a two or three year renewal and that would be less expensive to renew while still keeping reasonable license requirements. --Mike M. www.murraycavanaugh.com