Category: IRS AFTR COURSE

New Tax Preparer Roadmap to Success

How does one enter the highly competitive tax preparation industry? How does one go from starting out doing tax preparation for family and friends to becoming a credentialed tax expert? Is this even a sustainable business to have? These are all questions that you might find yourself asking if you are considering tax preparation as a skill to learn or a revenue stream to add to your current business. The important thing to remember is that no one starts out as a tax expert, and with the ever-changing tax laws, it takes continuing dedication to the role to stay on top of your game.

Many would-be tax professionals begin their tax careers at a big box retail tax office. These retail locations will offer tax courses before offering a compensated role to the student. This is a great place to start as it forces the student to learn tax fundamentals. Should they take a position at that firm, they will start to gain valuable tax office experience in a retail setting.

Other new tax preparers will get their start by shadowing another seasoned tax preparer. Often these new entrants may start out in reception or data entry roles in an accounting firm or some other financial services firm. Tax preparation goes hand in hand with accounting, bookkeeping, and payroll services, but adding tax preparation services to other financial business such as an insurance brokerage or a small business providing title loans is also fairly common.

After making it though their first tax season, if not already done in anticipation of their first tax season, a tax preparer who wishes to continue on in the tax industry will want to consider their credentials, their capabilities and their offerings. The IRS currently offers the voluntary Annual Filing Season Program (AFSP) for unenrolled tax preparers. Not only does this designation set unenrolled preparers apart, but it also allows the tax preparer to do some basic representation tasks, such as calling the IRS on behalf of a client whose return was prepared by the AFSP tax preparer. This is a service that is beneficial to both the tax preparer and the taxpayer because the tax preparer can bill for the service and the taxpayer is unlikely to communicate as effectively with the IRS as the tax professional. The AFSP is a program that must be completed yearly unless the tax preparer becomes an exempt preparer which can be done by becoming an Enrolled Agent (EA), a Certified Public Accountant (CPA) or an attorney.

A seasoned tax professional will likely strive to achieve such a respected designation in order to show the public their competency and experience in order to grow their business and reputation. While EAs and CPAs do not have to take yearly exams, they are required to meet yearly educational standards by way of continuing professional education. Once a tax preparer reaches this level of expertise in the field of taxation, finding employment becomes easier. The experienced, credentialed professional tax preparer may even open up a practice, opting for self-employment.

This brings us back to earlier question: Is this a sustainable business to have?  The short answer is "yes". The longer, more accurate answer is "it depends".  According to the National Taxpayer Advocate's annual report to congress in 2022, it was estimated that "roughly 50,000 IRS employees were expected to be lost through attrition over the next 6 years." Additionally, the industry itself has seen hundreds of thousands of accountants retire over that last few years, and whether prompted by the pandemic or simply aging out, this whole-industry attrition is leaving a large space that can be filled with new financial professionals.  There are some large pros and cons associated with working in the tax industry specifically that may have bearing on a person's decision to enter the tax world. Some cons: long work weeks during tax season, continuing education to maintain designations, strict deadlines, expensive punishments for repeated errors. There also some pros: moderately high salary, autonomy and know-how to open and run one's own business, high level of public trust and respect. All of these things will come into play as a new tax preparer makes their decision to stay or leave, just as it will for seasoned tax professionals who are deciding whether to leave or stay, but the bottom line is that, yes, the industry has room for you, and yes, it can be very lucrative when you take the role seriously, and you are billing your worth.

If you are interested in starting your own tax preparation business but have questions about how to get started, give us a call at 1 (866) 357-2052 or visit www.federaldirecttax.com.

Author Tina HarveyPosted on Categories IRS AFTR COURSETags , ,

Do I Really Need the AFSP Certificate of Completion?

The tax code can be complex, and staying up-to-date is crucial for any tax preparer. The IRS Annual Filing Season Program (AFSP) offers a voluntary path for non-credentialed preparers to enhance their expertise and gain a competitive edge. Here are some of the ways that obtaining the AFSP Certificate of completion is beneficial for tax preparers.

1. Boost Your Knowledge and Skills:

The IRS AFSP emphasizes continuing education (CE). By completing the required courses, you'll gain a deeper understanding of the latest tax laws and tax law changes. This not only improves the accuracy of your work but also allows you to confidently tackle a wider range of client tax situations.

2. Stand Out from the Crowd:

The tax preparation industry is competitive. Earning the AFSP Record of Completion demonstrates your commitment to professional development. You can display this credential to potential clients, signifying your dedication to providing high-quality service. Remember this is a yearly program so it will need to be completed by the end of the year, every year in order to stay active.

3. Limited Representation Rights:

Being able to speak with the IRS on behalf of your clients is probably the biggest benefit (and it can also increase your billings). Non-credentialed tax preparers typically cannot represent clients before the IRS. However, completing the AFSP grants you limited representation rights. This allows you to advocate for your clients during IRS examinations of returns you prepared and signed for the years that you were an IRS AFSP Tax Preparer.

4. Gain Recognition from the IRS:

Successful completion of the AFSP program gets you listed on the IRS directory of federal tax return preparers. This official recognition can boost your credibility and attract new clients seeking qualified professionals.

Is the AFSP Right for You?

The AFSP is voluntary and caters to non-credentialed tax preparers like yourself who want to elevate their skills and gain a competitive edge. If you're passionate about professional development and building a strong reputation a tax preparer, the IRS AFSP is an excellent opportunity to take your career to the next level. *This is an interim program until the IRS can get the statutory authority to require the Registered Tax Return Preparer program.

Additional Considerations:

Remember, the AFSP is not mandatory, and it does require that you agree to be bound by Circular 230.  However, as tax laws evolve, staying current is essential. The program offers a structured approach to continuing education and valuable recognition for your efforts.

Author Tina HarveyPosted on Categories IRS AFTR COURSETags , , , ,

Bought the Tax Course, Now What? Overcoming Confusion in Continuing Education

Continuing education (CE) courses are a vital part of staying sharp in the tax world. But let's be honest, sometimes you enroll in a tax course and think, "Uh oh, this is way over my head." We've all been there. Technical jargon, complex concepts – CE materials can be tough to navigate, especially when you are a new entrant to an industry.

So, what happens if you purchase a tax course and struggle to understand it? Don't panic! Here are some common pitfalls and how to overcome them:

Here's the good news: There's help available!

1. Leverage Course Resources: Many online courses offer built-in resources like glossaries, downloadable materials, and even discussion forums. Take advantage of these tools to clarify confusing terms and concepts.

2. Don't Be Shy - Reach Out to the Instructor: Don't hesitate to contact the course instructor with your questions. A good instructor should be happy to provide additional explanations or point you towards helpful resources.

3. Seek Out Real-Person Support: This is where we come in! At www.Preparertraining.com and Federal Direct Tax Services, we understand that sometimes you need a more personalized approach. That's why we offer real-person explanations by a licensed enrolled agent for our Tax Prep 101 package. Get your questions answered in plain English by a qualified professional who can break down complex topics and ensure you get the most out of your CE experience.

Remember, continuing education is meant to enhance your knowledge and skills, not leave you frustrated. Don't be afraid to ask for help! With the right resources and a little extra support, you can turn that initial confusion into a valuable learning experience that sets the stage for a bright career.

Author Tina HarveyPosted on Categories IRS AFTR COURSETags ,

When is my 2024 AFSP Due for the IRS?

In order to get your certificate of completion for the 2024 Annual Filing Season Program (AFSP), you must meet all of the requirements by the last day of the calendar year, December 31st, 2024.  This will enable you to be considered an "AFSP Tax Preparer" for the tax year 2024 (calendar year 2025).

The requirements to participate are:

  1. Renew or Obtain a Preparer Tax Identification Number via irs.gov/ptin.
  2. Complete the Annual Federal Tax Refresher.  This exam counts as 6 credit hours.
  3. Complete 10 credit hours of IRS continuing education from an approved continuing education provider in the General Tax Law category.
  4. Complete 2 credit hours of IRS continuing education from an approved continuing education provider in the Ethics category.

Ensure that all of your credits are reported to the IRS. Once you have met the requirements to participate the Annual Filing Season Program, the IRS will send you a message in your PTIN message box. Agreeing to be regulated under circular 230 is the last step in the process to become an IRS AFSP Tax Preparer.

Author Tina HarveyPosted on Categories IRS AFTR COURSETags , , ,