UNDERSTANDING TAX RETURN PREPARER CREDENTIALS AND QUALIFICATION
Federally Authorized Tax Practitioner included those enrolled to practice before the Internal Revenue Service, attorneys, and CPA's. These are authorized to represent clients at all administrative levels of the IRS, which include audits, payment/collection issues, and appeals Unlimited Representation Rights.
Below is a brief description of each class of the three classes of those who have unlimited represention rights:
* Enrolled Agents - Licensed by the IRS. Enrolled agents are subject to a suitability check and must pass a three-part Special Enrollment Examination, which is a comprehensive exam that requires them to demonstrate proficiency in Federal Tax Planning, individual and business tax return preparation, and representation. They must complete 72 hours of continuing education every three years.
* Certified Public Accountants - Licensed by state boards of accountancy, the District of Columbia, and U.S. territories. Certified public accountants have passed the Uniform CPA Examination. They have completed a study in accounting at a college or university and also met experience and good character requirements established by their respective boards of accountancy. In addition, CPA's must comply with ethical requirements and complete specified levels of continuing education in order to maintain an active CPA license. CPA's may offer a range of services' some CPA's specialize in tax preparation and planning.
Licensed by state courts, the District of Columbia or their designees, such as the state bar. Generally have on-going continuing education and professional character standards. Attorneys may offer a range of services; some attorneys specialize in tax preparation and planning.
Limited Representation Rights:
Some preparers without one of the above credentials have limited practice rights. They may only represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. They cannot represent clients whose returns they did not prepare and they cannot represent clients regarding appeals or collection issues even if they did prepare the return in question. Tax return preparers with limited representation rights include.
Annual Filing Season Program Participants
This voluntary program recognizes the efforts of return preparers who are generally not attorneys, certified public accountants, or enrolled agents. It was designed to encourage education and filing season readiness. The IRS issues an Annual Filing Season Program Record of Completion to return preparers who obtain a certain number of continuing education hours in preparation for a specific tax year.
Beginning with returns filed after Dec. 31, 2015, only Annual Filing Season Program participants have limited practice rights.
PTIN Holders -
Tax return preparers who have an active preparer tax identification number, but no professional credentials and do not participate in the Annual Filing Season Program, are authorized to prepare tax returns. Beginning January 1, 2016, this is the only authority they have. They have no authority to represent clients before the IRS (except regarding returns they prepared and filed December 31, 2015, and prior).1
There are also those taxpayers who prepare their tax returns themselves. These buy off-the-self tax preparation software, file through an online portals or prepare the return by hand.
For most taxpayers their tax returns from year-to-year are pretty much the same as the one the year before. However, most taxpayers experience infrequent complicated events which are out-of-the ordinary. These extraordinary events often require a more knowledgeable and experienced tax professional than the professional ( or do-it-your-selfers) that they have engaged for many years. In other words, the expertise required to handle the tax ramifications of the event properly is above the tax professional's pay grade.
At ASHEVILLE TOTAL TAX SOLUTIONS, we specialize in assisting taxpayers and their tax professional in finding the answer to these infrequent, complex income tax issues. Although at ASHEVILLE TOTAL TAX SOLUTIONS, we engage in tax preparation work, we are not interested in expanding that tax services. Thus, the taxpayer is encouraged by us to return to their tax professional or to buy off-the-shelf tax preparation software to fill their tax compliance needs
ASHEVILLE TOTAL TAX SOLUTIONS is staffed with Enrolled Agents. It is now expanding its tax consulting/advisory division as well as assisting clients in procuring favorable private letter ruling from the National office of the IRS.
1 Internal Revenue Service website.