How to Become a Registered Tax Return Preparer: A Comprehensive Guide
As the landscape of tax law and preparation evolves, aspiring professionals often face a series of questions regarding how they can enter this lucrative field. This guide aims to provide a comprehensive overview of the steps necessary to become a registered tax return preparer (RTRP) in the United States.
The Path: From the Past to the Present
To begin, it is important to understand the historical context of becoming an RTRP. In the past, getting a 'time machine' would have allowed you to secure an RTRP certification. Unfortunately, due to the Loving decision, only a select few could obtain this certification through voluntary programs. Currently, the process is more straightforward but still requires a dedicated approach.
Since the Loving case, the landscape has changed. The Registered Tax Return Preparer (RTRP) certification has evolved, and nowadays, aspiring tax preparers must adhere to the annual registration requirement. This article will explore the various pathways to becoming a reputable and certified tax return preparer, including becoming an enrolled agent, a Certified Public Accountant (CPA) with a focus on tax preparation and planning, or a tax attorney.
Step-by-Step Guide to Becoming a Tax Return Preparer
Option 1: Becoming an Enrolled Agent
An enrolled agent (EA) is an individual who practices before the Internal Revenue Service (IRS) and specializes in tax representation. To become an EA, follow these steps:
Pass the Enrolled Agent (EA) Exam: This exam is a comprehensive test of your knowledge and skills in tax law, ethics, and representation. The exam covers various topics, including tax returns, audits, tax credits, and penalties.
Demonstrate Qualifying Experience: You must have at least two years of experience in the practice of before the IRS or have the required experience and education recognized by the IRS.
Background Check and Ethics: A four-year background check is conducted, and you must agree to comply with the IRS’s code of conduct.
Option 2: Becoming a Certified Public Accountant (CPA) Specialized in Tax Preparation and Planning
A certified public accountant (CPA) with a specialization in tax preparation and planning is another path to becoming a tax return preparer. This option involves:
Pass the CPA Exam: The CPA exam is a four-part test that assesses your knowledge in areas such as auditing, taxation, business environment and concepts, and accounting and business law.
Gain Relevant Experience: You need to gain at least one year of experience in the field of taxation before applying for the registration program.
Comply with Ethics and Annual Registration: You must adhere to the IRS’s ethics standards and renew your CPA registration annually with the relevant state licensing agency.
Option 3: Becoming a Tax Attorney
A tax attorney is an individual who provides legal representation and advice in tax matters. Here is how you can achieve this:
Obtain a Law Degree: Complete a Juris Doctor (J.D.) degree from an accredited law school.
Pass the Bar Examination: Successfully pass the bar examination in the state where you wish to practice.
Gain Relevant Experience: Gain at least one year of experience in the practice of tax law before applying for the IRS's program.
Conclusion: Striving for Excellence in Tax Preparedness
Becoming a registered tax return preparer is a journey that requires dedication, experience, and a commitment to statutory compliance. Whether you opt to become an enrolled agent, a CPA with tax specialization, or a tax attorney, the key to success lies in a thorough understanding of tax laws, continuous professional development, and meticulous attention to detail. By taking the steps outlined in this guide, you can pave the way to a successful career in tax preparation and planning.