NSA Submits Comments to IRS on Competency Test

11 Jul 2011 4:21 PM | Anonymous

In response to IRS Notice 2011-48, NSA on June 7 submitted comments to the IRS on the makeup and administration of the tax preparer competency examination expected to be available sometime this fall.

Highlights of NSA’s comments:

  • The examination has been frequently described by various IRS officials as testing tax knowledge to ascertain “minimal competency.” It should not be confused with, or be equivalent to, the Enrolled Agent examination, the CPA examination, or other examinations that clearly test for knowledge that is beyond minimal competency.
  • NSA believes the level of expertise expected by the IRS when approving VITA volunteers is one of at least minimal competence. We are comfortable with this expectation and believe the same standard should be used for determining minimal competence by paid preparers. Accordingly, the examination should be no more difficult than the examination given by the IRS to select VITA volunteers.
  • The areas of tax law that should be covered by the examination should include only those covered in Publication 17, basic areas covered in Publication 334 and the ethics, penalty and education provisions of Circular 230.
  • The exam results should be reported to the applicant with a pass/fail indicator when completed. However, both those who pass and those who do not should be provided a document showing the number of correct/incorrect responses by area of tax law.
  • The examination should be offered on a monthly basis.

A copy of NSA’s comment letter to the IRS is available in the NSAlert Document Library. Click here to go there now.
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