Will the IRS Modify the Law to Win the RTRP Battle? Ya, They Have That Kind of Power!

The IRS has been extremely quiet recently about he IRS Exam for RTRP, (Registered Tax Return Preparers)  Those of us who already passed the exam are continuing to use the letters behind which designates us as RTRP.

To be honest, I'm a little nervous about how silent the IRS has been over this matter.  In my opinion, the outcome can't be good for preparers.  When the IRS is this silent, it usually means they are coming up with ways to WIN the battle!  (Of course I only have 15 years of professional experience with them, perhaps those who have been tax professionals for a much longer time can shed some light on the situation.)

Below is a letter from one of the educational providers:


***

May 2, 2013

I am resuming my email communication with you, my Newsletter subscriber, after the suspension of the RTRP exam last January.   Many RTRP exam candidates were caught by surprise in different stages of their preparation for the RTRP exam. And most were left confused an unclear on how to proceed for lack of a pronouncement by the IRS on several questions regarding the RTRP exam.   It looks like the future of the RTRP exam depends on whether the IRS wins its appeal on the Loving vs IRS case or congressional initiative to modify the law prosper. Getting the RTRP credential on a voluntary basis does not seem likely because the agreement to administer the exam included a clause prohibiting the vendor (Prometric) from offering it for voluntary compliance -according to the IRS.   If you want to sign a petition supporting the law modification, you can go here     So, one alternative for non-credentialed tax preparers is the Enrolled Agent exams or the SEE-Special Enrolment Examination which is a voluntary credential. The Enrolled Agent is, perhaps, the most authoritative denomination in the tax preparation industry because the content of its three exams is substantially more comprehensive than the content of the RTRP exam. The Enrolled Agent is required to demonstrate much broader competence in its practice before the IRS than is expected from the holder of an RTRP credential. I will be including more information about the Enrolled Agent's exam in future emails.   In the meantime, I hope tax preparers who already earned the RTRP credential are promoting its merits, giving it credibility and legitimacy among clients as well as in their marketing initiatives. As taxpayers become increasingly demanding and skeptical consumers (with all the threat and fraud cases going on in the tax preparation industry), being a credentialed tax professional will increase your competitive advantage and your revenue potential because you are viewed as a more valuable operator in the tax return preparation marketplace.   From our side, we have good news. Even though the RTRP exam is currently suspended, we have been updating our study materials to the changes introduced in the laws and regulations for 2013. We have also a new line of tax preparation as well as other new learning tools such as the tax study cases.   We believe that a decision to invest in education is always a good decision because, in reality, it is an investment in you. To contribute along those lines, I am making available a new, updated version of the 1040examprep study materials.   I will leave you until next week with the New York attorney general advice to taxpayers about best practices in hiring tax preparers in order to avoid "deceptive and fraudulent practices..." during the tax season.   I challenge you now to test the tax preparation service you provide by seeing if you measure up to the following recommendations of a New York attorney to clients before they hire the services of a tax preparer. Following are the attorney's recommendations.   Use recognizable and established companies; Check the tax preparer's qualifications; Check the tax preparer's history through the Better Business Bureau (www.bbb.org); Ask for a written estimate of all fees; Avoid those who base their fees on a percentage of your refund; Make sure the tax preparer is accessible, even after the April due date; Never sign a blank return; Review entire return before signing; Make sure the preparer signs the tax form and includes a Preparer Tax Identification Number, or PTIN; Avoid "too good to be true" promises; Consult New York's "Consumer Bill of Rights Regarding Tax Preparers." Did you pass this test?   We suggest you offer the following guarantees for your services and make sure you deliver on each and every one of them. This text you can add to your written communications - emails, letter and similar: "We provide written estimates for all fees of our services and our fees are not based on a percentage of any refund. We and our staff members are all credentialed tax preparers and we sign every tax return we prepare, and include our PTINs. We are accessible year round at our address and phone. Most importantly, we adhere to the IRS code of ethics (Circular 230) and those of (tax preparer associations) that we are member ".   Sincerely,   Norma Wahnon   P.S. Hopefully next email will bring the access to the reformulated website.

To My Tax Students:

Some of my tax students have been doing taxes for twelve years this coming tax season, an I would like to say congratulations.

By this time you understand why almost all "the secrets" are hidden in taxes.  During those twelve years, you will have done taxes one year for each disciple.  Two or three of those years, you may not remember very well.

If you have not already taken the new IRS exam for tax preparers, now would be a good time to start preparing. (October 2012)

Sit for the exam near the end of the year while others are focusing on the holidays.  And during this period of time, keep asking yourself, why as "that woman" who was nine months pregnant riding a donkey to pay the taxes?  (class key code)

And know that the IRS is more interested in knowing that you understand Publication 230, more than anything else.

Respectfully
Your Tax Instructor


ingraham, cassandra a., RTRP

Tip for the Tax Return Preparers Exam

Tax Return Preparers Test Hot Topic: 

Ethics: Circular 230 Sub-Parts A, B, and C

Circular 230 sets forth stringent ethical standards and disciplinary sanctions for violations of those standards. The new scope introduced by the 2011 IRS and Treasury Department amendment to Circular 230 extends the applicability of the standards and sanctions in Circular 230 to registered tax return preparers. Therefore, 15% of the questions in the competency examination necessary to become a registered tax return preparer pertain to topics in Sections A, B and C of the Circular.

-------------------

Many have reported that the test clearly includes more than 15% questions on ethics.  Take this info for what it's worth.