Everything You Need to Know About the New IRS Voluntary Preparer Program!

Posted by Lee Reams Sr. on

One BIG Reason Why You Should Participate - Failure to participate in the program will impede an unenrolled preparer’s ability to represent the returns he or she has prepared before the IRS. Beginning in 2016, an unenrolled preparer must have a “Record of Completion” for the year in which the return was prepared AND the year of the audit to represent a return he or she has prepared. So if an unenrolled preparer does not participate every year, he or she will no longer be able to represent returns he or she has prepared before the IRS. This could have a profound impact on a tax practice.    

Example: Mac is an unenrolled tax preparer. He chooses not to participate in the voluntary program for the first year of the program (2015). During 2015 he prepares a 2014 individual return for his client Jack. Max decides to participate in the voluntary program for 2016 and obtains a “Record of Completion” (ROC) for 2016. In 2016, Jack’s 2014 return is selected for audit. Mac cannot represent his client in audit because to do so, he must have had ROCs for both the year of preparation and the year of audit, and Mac only has an ROC for the year of audit.

So How Do You Obtain an Annual Record of Compliance? – It is not all that difficult and is probable quite beneficial. If you do not meet one of the exemptions listed later, then here is what you need to do:

  • Complete the annual CE requirements from an approved IRS education provider by the end of 2014.
  • Take the Annual Federal Tax Refresher (AFTR) course from an approved IRS education provider and pass the AFTR course final examination administered by the education provider. This must be completed by the end of 2014.
  • Renew your PTIN for 2015.
  • Agree to abide by the provisions of Circular 230, Subpart B.

See details related to each of the requirements later in this article.

Exceptions Apply to Certain Preparers – The IRS has acknowledged that some categories of unenrolled preparers are already subject to certain education and competency testing requirements and thus exempted from the requirements to take the Annual Federal Tax Refresher (AFTR) course and pass the AFTR examination. However, these unenrolled preparers must still meet all of the other requirements to obtain a Record of Completion listed above.

  • CTEC (California) Registered Tax Preparers (CRTPs) who are registered for the 2014-15 fiscal year. Note: CRTPs must be registered for 2015 by December 31, 2014, to qualify.
  • Oregon tax preparers in good standing with the Oregon program.
  • Those who have passed the former Registered Tax Return Preparers examination.
  • Those who have passed the ATP test offered by the Accreditation Council for Accounting/Taxation.
  • Those who have passed Part 1 of the Special Enrollment Examination within the last 2 years.
  • VITA program reviewers and instructors.

Details of the Various Requirements:

  • CE requirements – For 2014 the CE requirement has been prorated because the program started mid-year; the requirement is 11 hours of CE credit, which is made up of 6 hours from the refresher course (AFTR), 3 hours of additional federal tax law subjects, and two hours of ethics. (Beginning in 2015, the CE requirement is increased to 18 hours for preparers not qualifying for AFTR exemption, including the 6-hour refresher course, 10 hours of other federal tax law topics, and 2 hours of ethics.) All courses must be taken from an approved IRS continuing education provider and must be completed by the end of 2014 to qualify. ClientWhys offers a variety of CE courses to complete this need. www.taxcpe.com
  • Annual Federal Tax Refresher (AFTR) – The content of the refresher course is specified by the IRS. It is up to each IRS approved provider to develop a course around the content specified by the IRS, and the course must provide 6 hours of education. Thus, there is no standard course, and the educational value of a course is dependent upon the expertise of the provider. At the conclusion of the course, providers will administer a timed, 3-hour final examination of 100 multiple choice questions. Students must achieve a passing grade of 70% or better. Providers that only have 100 questions can allow one retake if the student fails the examination. Providers that randomly pull exam questions from a bank of questions can permit unlimited retakes. Students must pass the examination by the end of 2014 to qualify for the 2015 Record of Completion. ClientWhys offers an AFTR course that utilizes a bank of questions, allowing multiple retakes if necessary. www.taxcpe.com
  • PTIN – To obtain a Record of Completion, the unenrolled preparer must have renewed his or her PTIN for 2015. Unlike the education requirements, The PTIN renewal can be accomplished after the end of 2014.
  • Circular 230 Compliance – Once the preparer completes the education requirements, the completion has been reported to the IRS by the approved IRS education providers and posted to preparer’s PTIN account, and the PTIN has been renewed for 2015, the IRS will automatically send the preparer an e-mail with instructions to go to his or her PTIN account and complete the final step. The preparer must sign a statement agreeing to comply with the provisions of Circular 230, Subpart B, “Duties and Restrictions Relating to Practice Before the Internal Revenue Service.” Once this step is completed, the preparer can go to the secure mailbox and retrieve or print the Record of Completion.
  • IRS Directory – In January 2015, the IRS will launch a directory that will include all enrolled preparers and unenrolled preparers with a Record of Completion.

The following is a block diagram providing an overview of the process to obtain a “Record of Completion” for the coming year.




California Registered Tax Preparers (CRTPs) – CTEC will automatically and periodically provide the IRS with reports of those who have registered or renewed their registration with CTEC for the coming year. The IRS will use those reports to mark your PTIN account as exempt from the AFTR requirement. In addition, your 2014 CTEC education requirements to renew your CTEC registration more than meet the current voluntary plan education requirements to qualify the Record of Completion. However, you must complete the final step of signing the statement agreeing to comply with the provisions of Circular 230, Subpart B, before the Record of Completion will be posted to your PTIN account.

If you are already convinced that the program’s benefits are worth the effort, we publish several IRS Federal Tax Refresher Course options.

If you never became a RTRP, start here.

If you did become a RTRP, you can take a shorter program; start here to register.

ClientWhys has been in the tax education business for over 30 years. If you have questions regarding the New IRS Voluntary Preparer Program we encourage you to give us a call, 1-800-442-2477 Ext 1.