A degree is not necessary to become a paid tax preparer in the U.S. In fact, until the IRS enacted new requirements in 2011, only certain types of preparers and those participating in IRS volunteer tax preparation programs needed to obtain any type of formal training. Under the new rules, all paid tax preparers will be required to obtain tax preparer ID numbers, take proficiency exams and complete continuing education coursework.
Volunteer Tax Preparers
If you volunteer to prepare taxes as part of the IRS-sponsored Volunteer Income Tax Assistance (VITA) program, Tax Counseling for the Elderly (TCE) or any other volunteer program, you are required to go through training and receive certification. Training involves five levels: basic, intermediate, advanced, international and military. All volunteers must pass the basic level, but can also choose to go further in their training. A score of 80 percent is considered passing.
Paid Tax Preparer Oversight
No formal education is required to become a paid tax preparer. Those who prepare tax returns for pay are subject to varying degrees of governmental oversight. If you intentionally misrepresent a taxpayer's return in his favor, you might be charged one or more penalties. The same goes for not signing a client's return or failing to provide a tax ID number on a return prepared for money.
Paid Tax Preparer Rule Changes
As of January 1, 2011, the IRS established a program to create more accountability for all paid tax preparers. The first phase requires you to obtain a preparer tax identification number (PTIN) for an annual fee. The second stage, to be rolled out in mid-2011, is the proficiency exam. No pre-test schooling is required. Licensed CPAs, enrolled agents, attorneys in good standing and certain other preparers are exempt from taking the exam.
New Education Requirements for Paid Tax Preparers
Although a degree is still not mandatory for paid tax preparers, continuing education is the last phase in the 2011 set of paid tax preparer requirements. The IRS will contact you with details after you receive your PTIN. If you were exempt from taking the proficiency exam, you are also exempt from completing continuing education courses.
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