Denician Angeleia

Choosing to become a tax preparer now places you in an exclusive group of professionals as a result of the IRS implementing competency testing and registration. A high level of expertise is required of anyone preparing tax returns. The main purpose behind creating the designation of Registered Tax Return Preparer is to provide uniform standards that increase accuracy.

Completion of tax class training allows you to work as a tax preparer for either a small company or a large company. As a RTRP you are permitted to make judgments that affect substantial parts of a tax return.

However, many individuals who complete an income tax course will start their own independent practices. This is especially true after they develop some experience with different types of tax reporting.

In addition, due to the licensing requirement for tax preparers, there is less competition within the industry. Extremely small operators are ceasing to have economic viability. One of the reasons is that tax preparers must have the ability to electronically file tax returns. The IRS is requiring electronic filing in 2012 by anyone preparing more than 10 individual tax returns per year. This requires an investment in software and technology that’s not particularly difficult but is expensive enough to demand a full-time commitment to your setup for tax work.

Of course, tax preparers are competing with CPAs. But the registration of tax preparers strengthens their comparable standing. Although CPAs are trained in many financial matters, they are not required to have greater tax knowledge than other tax preparers. In fact, many tax preparers work for CPAs to gain experience before establishing their own tax practices.

CPAs usually provide services other than tax return preparation. This allows tax practitioners to promote their exclusive dealing with tax matters. A RTRP can even expand tax services offered by obtaining the Enrolled Agent designation. This requires additional study that not only makes you more knowledgeable about tax subjects but also prepares you to pass the Enrolled Agent test.

Enrolled Agents are tax specialists specifically designated by the IRS. They still prepare tax returns. But Enrolled Agents can also represent taxpayers before the IRS. This allows you to help individuals respond to IRS notices or audits. You can also negotiate agreements for settling tax liabilities with the IRS.

Enrolled Agent continuing education requirements are more extensive than for tax preparers. That’s just another fact for Enrolled Agents to use in promoting themselves as possessing a particularly prestigious level of expertise. Passing the Enrolled Agent examination is likely to make you a trusted adviser to taxpayers in addition to a preparer of tax returns. That keeps you busy throughout the year by helping people understand the tax considerations involved in their planning and decisions.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

 

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