With the current IRS licensing on hold, Robert Flach, the Wandering Tax Pro, proposed a voluntary licensing program on his blog and asked for comments and thoughts. Here are mine.
This is all conjecture since we don’t know yet know how the IRS will respond to the defeat. But assuming the decision doesn’t get overturned and Congress doesn’t pass a proper law here is what I think about a voluntary tax preparer certification/licensing program.
The PTIN program is continuing. Loving vs. IRS didn’t change that. I also don’t think the fees will change because the IRS needs to cover the cost of the registration program and PTIN database. Renewal should be annually or at the most every two years. Over 2 years and the lists become stale.
As for the voluntary licensing, which one? It would be nice to think that one of the existing tax preparer organizations will create a definitive program but I can see testing and certification programs popping up all over the place. That could be the downfall of a voluntary program; too many options and criteria. Each program would have their own designation and qualifications. Tax preparers could chose the program they like the best (easiest test, least continuing education, lowest cost). Taxpayers would be confused trying to keep the designations separate.
If I was creating the program, I would have a mandatory test and annual continuing education of at least 15 hours for anyone preparing over 10-15 returns a year. I wouldn’t have grandfathering (sorry Robert) because I’ve seen too many “experienced” preparers make mistakes. If you’re going to have a standard, everyone should have to meet the same standard no matter how long they’ve been in business or how many returns they do a year. Keep it simple.
About the test. It wouldn’t be open book. It should go a bit beyond the minimum knowledge of the RTRP test. If you’re going to competency test someone, you should really test their knowledge especially if you are going to market that person as an expert.
I also don’t care what they call the new program as long as it won’t be confused with “Enrolled Agent”.
The key to any licensing program is education of taxpayers. They have to know how it’s to their advantage to use a certified/licensed tax preparer as opposed to one who isn’t.
So that’s my idea for voluntary certification/licensing; a proper test and continuing education with the same standards for everyone. Then spend some money marketing your graduates to the taxpayers.