Author Archives: phoenixtax

Important Information Regarding the Enrolled Agent Special Enrollment Examination

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The government shutdown has delayed the annual revision of the Special Enrollment Examination. The examination administered starting on May 1, 2019 has not yet been updated and reflects tax law for the calendar year 2017. A revised examination will be released on July 1, 2019 and will be based on tax law for the calendar year 2018.

SEE Revised Test Beginning July 1

To ensure that the SEE accurately incorporates the changes resulting from the Tax Cuts and Jobs Act and continues to reflect the skills and knowledge necessary to be an enrolled agent, the IRS commissioned a review and update of the SEE test specifications. Enrolled agents from the private sector and subject matter experts from the IRS participated in updating the test content.  As a result, there were changes to the test specifications affecting test content topics for the SEE to be administered beginning July 1, 2019.

For examinations delivered through June 30, 2019:

For examinations beginning July 1, 2019:

New Enrolled Agent Logo Available

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The IRS is providing a new enrolled agent logo that EAs may use in marketing materials.

The new logo replaces a logo IRS created in 2012. While use of the new logo is optional, use of the prior logo must cease. The prior logo contains a likeness of a government insignia, which by law limits its use to officers and employees of departments and agencies of the United States. We apologize for this error and any confusion that we may have caused.

Enrolled agents have until October 31, 2018 to discontinue use of the logo containing the IRS eagle. The obsoleted logo may not appear in any publications, advertising, websites, business cards, or other communications with clients or prospective clients.

For further guidance on marketing materials, please refer to Circular 230, particularly § 10.30 regarding Solicitation.

Active enrolled agents can obtain the logo by emailing a request to epp@irs.gov with the subject line “EA logo.”

Annual Filing Season Program

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Everything you want to know, but were afraid to ask!

  1. What is the Annual Filing Season Program (AFSP)?
  2. What are the benefits of participation in the AFSP?
  3. How do I participate in the AFSP?
  4. What are the continuing education requirements?
  5. Are some people exempt from the AFTR course?
  6. I am exempt from the AFTR. What are my requirements?
  7. Where do I get this continuing education?
  8. How much does the AFSP cost?
  9. Can credentialed tax preparers participate in the AFSP?
  10. How/when do I get my record of completion?
  11. How does the IRS know if I completed the AFSP requirements?

1. What is the Annual Filing Season Program?
The new Annual Filing Season Program is a completely voluntary program intended to recognize and encourage unenrolled tax return preparers who aspire to a higher level of professionalism and voluntarily increase their knowledge to improve their filing season competency through continuing education.

2. What are the benefits of participation in the AFSP?
AFSP participants will receive an AFSP Record of Completion, and be included in a public database of return preparers scheduled to launch on the IRS website by January 2015. The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications will include the name, city, state, zip code, and credentials of all attorneys, CPAs, enrolled agents, enrolled retirement plan agents and enrolled actuaries with a valid PTIN, as well as all AFSP – Record of Completion holders.

3. How do I participate in the AFSP and get the Record of Completion?

  • Complete certain specific continuing education requirements yearly. (More details below)
  • Have and renew a preparer tax identification number (PTIN) yearly.
  • Consent, yearly, to adhere to practice obligations outlined in Subpart B and section 10.51 of Treasury Department Circular No. 230.

4. What are the continuing education requirements?

  • Filing season 2015. Take 11 hours of continuing education from IRS-Approved CE Providers, including:
    1. a six (6) hour Annual Federal Tax Refresher (AFTR) course with a knowledge-based comprehension test administered at the end,
    2. three (3) hours of other federal tax law topics; and
    3. two (2) hours of ethics.
  • Filing season 2016 and after. Take 18 hours of continuing education from IRS-Approved CE Providers, including:
    1. a six (6) hour Annual Federal Tax Refresher (AFTR) course with a knowledge-based comprehension test administered at the end,
    2. ten (10) hours of other federal tax law topics; and
    3. two (2) hours of ethics.

*Note: Some preparers are exempt from requirement #1, the AFTR Course. See below.

5. Are some people exempt from requirement #1, the AFTR course?
If you meet one of the exemptions below, you take 3 hours of federal tax law updates instead of the AFTR course.

  • Anyone who passed the Registered Tax Return Preparer test administered by the IRS between November 2011 and January 2013.
  • Established state-based return preparer program participants currently with testing requirements: Return preparers who are active members of the Oregon Board of Tax Practitioners and/or the California Tax Education Council.
  • SEE Part I Test-Passers: Tax practitioners who have passed the Special Enrollment Exam Part I within the past two years as of the first day of the upcoming filing season.
  • VITA volunteers: Quality reviewers and instructors with active PTINs.
  • Other accredited tax-focused credential-holders: The Accreditation Council for Accountancy and Taxation’s Accredited Business Accountant/Advisor (ABA) and Accredited Tax Preparer (ATP) programs.

6. I am exempt from the AFTR. What are my continuing education requirements?
The AFTR requirement is replaced by a 3 hour federal tax law update requirement.

  • Filing season 2015. Take 8 hours of continuing education from IRS-Approved CE Providers, including:
    1. three (3) hours of federal tax law updates,
    2. three (3) hours of other federal tax law topics; and
    3. two (2) hours of ethics.
  • Filing season 2016 and after. Take 15 hours of continuing education from IRS-Approved CE Providers, including:
    1. three (3) hours of federal tax law updates,
    2. ten (10) hours of other federal tax law topics; and
    3. two (2) hours of ethics.

7. Where do I get required AFSP continuing education?
You may take the AFTR course and obtain other continuing education from any IRS-Approved CE Provider.

8. How much does the AFSP cost?
The cost of your yearly PTIN renewal, plus the cost of continuing education purchased from IRS-Approved CE Providers.

9. Can credentialed tax preparers participate in the AFSP?
The IRS didn’t design this program with credentialed tax professionals in mind. However, if an attorney, certified professional accountant, enrolled agent, enrolled retirement plan agent, or enrolled actuary seeks to participate in the program, they would be required to meet the same CE requirements as preparers in the exempt category.

10. How/when do I get my record of completion?
After PTIN renewal season begins in October 2014, a Record of Completion will be generated to you once all requirements have been met, including renewal of your PTIN for 2015 and consent to the Circular 230 obligations. If you have an online PTIN account, you will receive an email from TaxPro_PTIN@irs.gov with instructions on how to sign the Circular 230 consent and receive your Record of Completion in your online secure mailbox. If you don’t have an online PTIN account, you will receive a letter with instructions for completing the application process and obtaining your record of completion.

11. How does the IRS know if I completed the AFSP requirements?
All IRS-Approved CE Providers must report completed continuing education hours to the IRS Return Preparers Office. You can view that information in your online PTIN account. Be sure to give IRS-Approved CE Providers your proper PTIN so they can report your CE accurately and in a timely fashion.

No Appeal in Loving v. IRS

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The IRS took no action in the matter of Loving v IRS and allowed the May 12th deadline for filing a Supreme Court appeal to pass.

In January of 2013, a federal court judge ruled that Congress had never granted the IRS authority to regulate tax return preparers, and in February of this year, the US District Court of Appeals for the District of Columbia Circuit agreed.  Writing on behalf of the court, Judge Kavanaugh summarized, “We agree with the District Court that the IRS’s statutory authority under Section 330 cannot be stretched so broadly as to encompass authority to regulate tax-return preparers. We therefore affirm the judgment of the District Court.” 

Further appeal was seen as unlikely as there was no disagreement between the district and appeals court. In addition, IRS Commissioner, John Koskinen, previously indicated in several interviews and testimony before Congress that, though the IRS was still reviewing options, a voluntary program seemed the best approach moving forward. “The idea of a voluntary program is under consideration because we believe it is important to maintain the momentum for regulation and oversight of unregulated preparers that has built up over the last five years, and to lessen the risks to taxpayers resulting from the lack of federal education requirements.”

You may read the full text of IRS Commissioner Koskinen’s April 8th testimony before Congress below:

Document Links

 

IRS Nationwide Tax Forums Now Open for Registration

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Join tax professionals from across the country at the IRS Nationwide Tax Forums for three days of the latest tax law information, hands-on workshops, and exhibits of new products and services.

Take advantage of this opportunity to receive up to 18 CPE credits, network with your peers, and learn from subject matter experts from the IRS as well as from our national association partners.

For more information or to register, please visit the IRS Nationwide Tax Forum website at www.irstaxforum.com.

Appeals Court Rules against the IRS in RTRP Case.

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On February 11th, 2014, the US District Court of Appeals for the District of Columbia Circuit issued its ruling in Sabina Loving et. al. v IRS et. al.  Writing on behalf of the court, Judge Kavanaugh summarizes:

“We agree with the District Court that the IRS’s statutory authority under Section 330 cannot be stretched so broadly as to encompass authority to regulate tax-return preparers. We therefore affirm the judgment of the District Court.” 

The court lists and explains 6 reasons to support its opinion:

  1. The court does not accept the IRS argument that tax preparers are “representatives of persons.”
  2. While tax preparers could be deemed to have a “practice”, it is not a “practice….before the Department of Treasury.”
  3. The court disagrees with the IRS’s reading of the history of Section 330. The history of Section 330 does not support the IRS’s interpretation.
  4. The IRS’s interpretation is inconsistent with the “broader statutory framework” and would make existing laws for regulating tax return preparers essentially unnecessary.
  5. Courts should tread lightly when interpreting congressional intent in a manner that would empower an agency to make major political or economic decisions.
  6. The IRS never before claimed that Section 330 authorized the agency to regulate tax-return preparers.  While an agency may update the interpretation of statutes it administers, it is clear that no previous IRS administration claimed this authorization because it is incorrect to do so.

It is not known at this time if the IRS plans an appeal.  You may read the full text of the ruling below.

Document Links

Ruling: Sabina Loving et. al v IRS et. al.

RTRP Case: Former IRS Commissioner Gibbs argues for IRS in Tax Notes

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In the October 2013 issue of Tax Notes, former IRS Commissioner Lawrence B. Gibbs argues that the District Court erred when it ruled in Loving v. IRS that the Treasury had no authority to regulate currently unregulated commercial preparers.  The article, which originated as a presentation at Villanova’s Annual Law Review Symposium, makes the following points:

  • The language and history of the statutes authorizing Circular 230 regulations make it difficult to believe that Congress intended to authorize the Treasury to regulate tax professionals who interact with the IRS regarding returns that have already been filed, but not the tax professionals that prepare those returns.
  • Tax preparation is indeed “representation” and that a tax professional preparing a return is analogous to an attorney preparing a will, both clearly representational activities. People could do it themselves, but they often engage a professional to advise, assist and prepare the documents.
  • That since Plaintiffs and Defendants have each presented differing interpretations of the key statutory phrase of section 330(a), “the practice of representatives of persons before the Department of the Treasury,”  the phrase should be considered “ambiguous.” Therefore the federal court must accept the IRS’s interpretation as correct under the precedent for determining whether to grant deference to a government agency’s interpretation of a statute set forth by “Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc”

The full Tax Notes is available in the documents links section below. It has been filed with the U.S. Court of Appeals for the District of Columbia Circuit by Appellants under Federal Rules of Appellate Procedure, Rule 28j.

Document Links

Oral Arguments Held in RTRP Case

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Oral arguments for Loving v IRS were held in the US District Court of Appeals for the District of Columbia Circuit on September 24th, 2013.  Judges Kavanaugh, Williams and Sentelle questioned lawyers for Appellants and Appellees on a variety of subjects, but focused primarily on the definition, history, and legislative intent of the terms “representation” and “presenting a case.” An audio recording of the complete oral arguments is freely available on U.S. Court of Appeals for the District of Columbia Circuit website.

Appeal Documents

2013 IRS Nationwide Tax Forums

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The IRS Nationwide Tax Forums are taking place across the country. The forums feature the latest tax law information, workshops, continuing education credits and exhibits of the newest products and services. There is still time take advantage of this great opportunity.

For more information or to register, visit the IRS Nationwide Tax Forum website at www.irstaxforum.com.

Be sure to check out the IRS Nationwide Tax Forums YouTube video.

Registered Tax Return Preparer Program suspended pending litigation.

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In a surprise move, a US District Court judge ruled against the IRS, denying its authority to regulate tax preparers and enjoined the agency against enforcing the Registered Tax Return Preparer requirements.  The IRS has released the following statement:

“As of Friday, Jan. 18, 2013, the United States District Court for the District of Columbia has enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers. In accordance with this order, tax return preparers covered by this program are not currently required to register with the IRS, to complete competency testing or secure continuing education. The ruling does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents or enrolled actuaries.

The Internal Revenue Service, working with the Department of Justice, continues to have confidence in the scope of its authority to administer this program. On Wednesday, Jan. 24, the IRS and Justice Department asked for the injunction to be lifted. Regardless of the outcome of that request, an appeal is planned within the next 30 days.“

READ ABOUT THE CASE

The name of the case is Loving, et. al. v. Internal Revenue Service, et. al., which challenges  the validity of the new regulatory scheme for “registered tax return preparers” brought under recent changes to Circular 230. The suit was brought by three independent tax preparers in conjunction with the Institute For Justice.

KEEP UP-TO-DATE

You can keep apprised of the latest developments and join the conversation at the following sites:

FREQUENTLY ASKED QUESTIONS

Can I schedule an RTRP test date? (updated 1.25.2013)
The IRS has temporarily shut down the online PTIN system; a test appointment cannot be scheduled at this time.

I am scheduled to take the RTRP test. Will I be able to take it? (updated 1.25.2013)
As of January 23, 2013, all test dates are suspended until further notice.

I am scheduled to take the RTRP test, will I get a refund? (updated 1.25.2013)
If you have scheduled to take the RTRP test, you can use the refund request form on the Prometric website, Prometric on their website or wait to see if the IRS will reinstate the RTRP exam. Contact Prometric at 800.853.6769 or 888.226.9336 for questions about refunds.  https://www.prometric.com/en-us/contact-us/Pages/reimbursement.aspx

I took the RTRP test and passed, will I receive my certificate? (updated 1.25.2013)
The IRS has not answered this question at this time.

I received my RTRP certificate, can I continue to use the RTRP designation? (updated 1.25.2013)
At this time, the IRS has not commented on the future of this designation.

Do I need to get CPE for this year? (updated 1.25.2013)
EAs, CPAs and attorneys must continue to meet their CPE requirements, as do preparers who are regulated at the state level. At this time, the IRS has suspended the continuing education requirement for other paid preparers.  This could change if the court grants the IRS request for a stay. The IRS continuing education reporting system is still available and The Phoenix Tax Group continues to report all completed continuing education to the IRS.