No to Additional Preparer Testing, Yes to CPE Requirements

I’ve written before that I don’t think CPAs or attorneys should be required to take the RTRP exam to prepare tax returns. I stand by that belief, even though I am in the minority among people who aren’t a CPA or an attorney (I’m an enrolled agent).

But I do think CPAs and attorneys should be required to show continuing education in the tax field. Currently, the IRS doesn’t require this of CPAs and attorneys.

Enrolled agents are required to have 72 hours of CPE  – 100% in taxation – in a 3-year period. The minimum amount we can get in any one year is 16 hours. (So theoretically an EA could take 16 hours in each of the first two years and then take 40 hours in year 3 and meet the IRS requirements.)

Members of the National Association of Enrolled Agents, such as me, are required to get a minimum of 30 hours a year. Many of us get much more than that. I strive to come in at at least 50 hours a year. I know some EAs who get 90 hours a year.

RTRPs are required to get 15 hours a year in taxation. I think it’s reasonable for the IRS to require 15 hours a year out of CPAs and attorneys, too.

I know that CPE can sometimes be seen as a joke, because at most seminars you can just sit there playing on your computer or phone all day and still get credit. Still, it does show at least some commitment to keeping current and expanding your knowledge of taxes.

To me, a CPE requirement makes more sense than a testing requirement.

To my surprise, The Wandering Tax Pro, Robert Flach, seems to be coming around to my viewpoint on this topic. Robert and I have disagreed on the topic of preparer regulation. But in his most-recent post on the topic, Robert sounds an awful lot like me! (I wrote my post prior to Robert’s post being published. It’s a happy coincidence that our posts on this subject are appearing just one day apart.)

As always, I’ll have more thoughts in future blog posts.

“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”

3 Responses to “No to Additional Preparer Testing, Yes to CPE Requirements”

  1. Robert D Flach November 14, 2012 at 6:41 am #

    Jason-

    We agree (I believe):

    (1) The RTRP competency test does not have much value, and should not be required as a condition of RTRP status.

    (2) The annual CPE requirement is a better measure of competence and currency in 1040 issues. CPAs and attorneys and “supervised” employees who want to prepare 1040s for compensation should be required to take the same 15 hours per year in federal taxation as “previously unenrolled” RTRPs in order to maintain their PTIN (actually 13 hours if the 2 hour ethics requirement is redundant).

    (3) If there is to be a competency test, experienced tax professionals should be exempt under “grandfathering”.

    (4) Enrolled Agents should be exempt from all requirements because they have already passed a more extensive test of tax knowledge and are already required to maintain more than 15 hours per year in CPE in federal taxation.

    Where we disagree is with the exemption from testing for CPAs and attorneys. You support it, while I believe that ALL tax preparers should be treated equally. If a test is to be required, CPAs, attorneys, and “supervised” employees who prepare 1040s should NOT be exempt. They should, however, be covered under any “grandftahering” provisions.

    As usual, looking forward to your additional thoughts in future posts.

    BTW – would you support a change of designation from EA to ERRP (Enrolled Tax Return Preparer)?

    RDF (aka TWTP)

    • Jason Dinesen December 1, 2012 at 7:01 am #

      Robert,

      I just realized I never responded to your comment. You are right, we agree on all 4 points you list, and disagree on the piece about testing of CPAs and attorneys.

      As for a name change for EAs … I think that is best addressed in a future blog post. Stay tuned!

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