Tax Preparer Licensing Laws
National Licensing Laws
The courts have prevented the IRS from imposing testing and education requirements on paid tax professionals. Although there is currently no minimum education or testing requirement to become a paid tax preparer, the IRS does require paid tax preparers to register with the IRS and obtain a Preparer Tax Identification Number (PTIN), pay a registration fee, and pass a tax compliance check.
Tax Preparer Identification Number (PTIN) Registration System
The IRS now requires ALL tax return preparers to apply for a PTIN using a new online registration system. This new registration system impacts ALL paid tax preparers including attorneys, CPAs, enrolled agents and unenrolled tax preparers. ALL tax preparers who prepare tax returns for a fee must be registered under the new PTIN system prior to preparing any 1040 tax return for a fee.
IRS Licensing of Enrolled Agents
The IRS currently administers a licensing program for Enrolled Agents and is working on releasing recommendations for a program to license or register all tax practitioners nationwide. Enrolled Agents are regulated by Congress. To become an enrolled agent you must either:
- Pass the Special Enrollment Examination, or
- Present evidence of qualifying experience as an Internal Revenue Service employee, and
- Pass a background check, which includes a review of your tax compliance history.
- A person authorized to practice before the IRS is described as a Federally Authorized Tax Practioner (FATP). FATP status is granted to Certified Public Accountants, attorneys, Enrolled Agents, Enrolled Actuaries and certain other individuals described in IRS Circular 230. Enrolled Agents and other FATPs are allowed to represent taxpayers in proceedings before the IRS including audits and appeals.
A CPA is a qualified accountant who has passed the Uniform Certified Public Accountant Examination and has met additional state education and experience requirements for certification as a CPA. CPAs are licensed through individual state boards of accountancy. CPAs provide specialized accounting services including:
- Financial audit services,
- Attesting to the reasonableness of disclosures,
- Adherence to the applicable generally accepted accounting principles (GAAP) in financial statements.
Many CPAs also specialize in income tax preparation and offer tax preparation services as primary or secondary services to their clients.
CPAs must adhere to ethical and continuing education standards set forth by state government accountancy boards.
Additional Licensing Information
Click on CPE Requirements for CPAs for state-by-state CPE requirements for CPAs.
Pacific Northwest Tax School is registered with the following organizations as an approved sponsor of CPE:
- IRS #VRD3D
- NASBA QAS #109290
- Oregon Board of Tax Service Examiners
- Texas State Board of Public Accountancy #009794
- New York State Board for Public Accountancy #002479