Taxes can be complicated. There are numerous laws and regulations that govern them, and it is important to have a thorough understanding of these rules. Tax preparation is an important and much needed service, so it is no surprise that careers in this field are becoming increasingly popular.
What is a Tax Preparer?
More than half of all taxpayers and businesses use a tax preparer to help them navigate tax laws when filing their tax return. Taxpayers trust these tax professionals with the most personal and sensitive details of their financial life - their marriage, their income, their children and their social security number. Because of this, tax preparers have to have a comprehensive understanding of tax laws and regulations to offer recommendations and advice on tax management and planning.
Benefits of Being a Tax Preparer
There are many benefits to becoming a tax professional. Most individuals are required by law to file taxes, and as the rules and regulations become increasingly complicated people are turning to professionals for help more than ever.
A career in tax preparation services can offer stability, flexibility, and a high earning potential. Helping individuals and businesses navigate their taxes can be highly rewarding, and tax preparers are often viewed as a trusted source and advisor by their clients.
Becoming a Tax Preparer
Obtain a Tax Preparer Identification Number
If you plan to prepare taxes for profit, the first step is to obtain a Preparer Tax Identification Number (PTIN) from the IRS. For information on how to apply for a PTIN and what is required to get started, visit the IRS website.
Do I Need a License to Prepare Tax Returns?
Most states do not require a tax preparer license, but in order to represent clients to the IRS, preparers must be credentialed as Certified Public Accountants (CPAs), Enrolled Agents (EAs) or Tax Attorneys. However, some states require additional credentials to prepare taxes. These states include:
- California
- Connecticut
- Illinois
- Maryland
- Nevada
- New York
- Oregon
It is important to always check specific state requirements before beginning a career in tax preparation.
IRS Annual Filing Season Program
While most tax preparers don’t have to have a credential to prepare taxes, it is important to have a foundation of knowledge, tax laws and tax software to be able to assist clients in filing their taxes. The IRS created the Annual Filing Season Program (AFSP), a professional education program for non-credentialed tax preparers, to increase the competency and knowledge of tax preparers through annual continuing education (CE) courses.
After a tax preparer completes the requirements for the Annual Filing Season Program, they will receive a Record of Completion (AFSP-RoC). Tax preparers can present or display their Record of Completion to their clients and in their marketing.
By earning your AFSP – Record of Completion, you will:
- refresh your knowledge with the latest tax updates and changes
- differentiate yourself from other unenrolled preparers
- become more discoverable through the IRS’s Federal Tax Return Preparers directory
- increase your marketability to clients and offer more services like representation
Tax professionals with an AFSP-RoC also receive limited representation rights. This means they can
represent their clients before certain IRS employees including the IRS’s customer service representatives and revenue agents. Credentialed tax professionals (including CPAs, EAs, and attorneys) continue to be the only return preparers with unlimited representation rights with the IRS, including with appeals, audits, and any payment issues.
Without an AFSP-RoC, a non-credentialed return preparer cannot represent clients before any IRS employees on any matter.
Tax Preparer Continuing Education
At WebCE, we know education is an
important part of professional development. After all, we specialize in it! Completing professional education through online courses written by industry experts can increase your competency in tax preparation and help you stand out from the competition by earning credits to obtain the AFSP-RoC.
Our Tax CE catalog includes a variety of tax training courses such as the
Annual Federal Tax Refresher (AFTR) course, tax ethics, tax law updates,
CTEC CE, and more. With tax preparer CE courses from WebCE, you can trust you are receiving the latest information at the best price. We offer superior online courses designed to help professionals, and we have a team of world-class live support professionals to help along the way!