The Internal Revenue Service is urging Indiana tax return preparers who have yet to schedule their competency test to register immediately as the deadline nears.
For most of these preparers, the appropriate test will be the Registered Tax Return Preparer competency test.
More than 60 percent of taxpayers nationwide use a tax preparer. The test is one phase of a multi-year effort by the IRS to increase oversight of the tax professional industry and help ensure minimal competency levels among those who are paid tax return preparers.
Under the new rules, all professional tax return preparers must register with the IRS, obtain a Preparer Tax Identification Number and adhere to ethical standards. Currently there are 14,629 Indiana preparers who have obtained a PTIN from the IRS.
Certain preparers must also pass the new test and complete 15 hours of continuing education each year. For these preparers the IRS created a new credential: Registered Tax Return Preparer. Next year, the IRS will launch a public listing for taxpayers and others to confirm preparers with professional credentials and valid PTINs.
While there are 314 preparers in Indiana that have already taken the RTRP test and become Registered Tax Return Preparers, there are still 6,245 who have yet to take the test.
Starting Jan. 1 only Registered Tax Return Preparers, Enrolled Agents, CPAs and attorneys will be authorized to prepare and sign individual tax returns.
Tax professionals who are Enrolled Agents, Certified Public Accountants and attorneys are exempt from the test, as are certain non-signing preparers and those who do not prepare the Form 1040 series.
The Registered Tax Return Preparer test has been available since November 2011. There are 260 testing sites nationwide with limited space.
To learn more about the test or to begin the scheduling process, preparers should go to www.irs.gov/taxpros/tests or www.irs.gov/TaxProfessionals/IRS-Test-Requirements-for-Becoming-a-Paid-Tax-Professional.
Cost to take the exam is $116.