ALEXANDRIA, VA, December 1, 2011 - The IRS has just announced that preparers planning to become IRS “Registered Tax Return Preparers” may now begin taking the required exam to earn this designation.
What should preparers do – and what should they know - before taking the exam?
The National Society of Accountants (NSA) recommends that preparers wait until after April 15, 2012 to take the exam, because at that point the exam will be updated to reflect the 2011 IRS Tax Code. Until then, it is based on the 2010 Tax Code.
“If you prepare a number of Form 1040 returns during tax season you will also be taking a cram course on the tax content in the exam,” says NSA Executive Vice President John Ams. “So why not take the exam right after that tax season ‘cram course?’”
The exam is 2.5 hours long and includes 120 questions, which will be both multiple choice and true/false. Form 1040, the 1040 instructions, and Pub 17 will be available online at the test center only (you cannot bring your own copy with you). A handlheld calculator will also be provided.
Pass/fail information will be available immediately except for the first 2,400 exam takers. The IRS will use these first exams to validate the test questions, so results will not be available for some weeks following the test.
Beginning December 16, 2011, NSA will offer a web-based tutorial to help preparers learn what they need to know to take this type of examination. The IRS has also posted a video on “What to Expect on Test Day” at www.youtube.com/watch?v=Q5FbshBloCw and an online sample test to demonstrate how an online test works at www.prometric.com/clientfiles/irs/irsrp/index.htm.
Preparers have until December 31, 2013 to successfully complete the test. NSA already offers a study course that can serve as a primary study guide or as a supplement to information preparers may already have. The course is available for purchase at www.nsacct.org.
The IRS Preparer Office is interested in whether preparers know the Tax Code rather than how to merely input information into tax software.
“Some NSA members who are older and have been tax professionals for some years are upset about the exam, and understandably so,” Ams adds. “However, as a group they are likely better equipped to take the exam than others. Why? Because they started preparing returns before tax software claimed to make everyone a tax expert. Many started by doing 1040s by hand and probably know more about deductions, credits, and limits than they care to admit. Moreover, they know where a particular number is supposed to be entered on a return and whether that number should be adjusted based on limits or other adjustments required by the Code.”
For more information about NSA resources to prepare for the IRS Tax Preparer Exam, visit www.nsacct.org or call 800-966-6679.
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NSA and its affiliates represent 30,000 members who provide accounting, auditing, tax preparation, financial and estate planning, and management services to approximately 19 million individuals and business clients. Most members are sole practitioners or partners in small- to medium- size accounting firms. NSA protects the public by requiring its members to adhere to a strict code of ethics. For more information, visit www.nsacct.org.