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IRS Provides More Details on Preparer Education Requirements

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August 20, 2010

The Internal Revenue Service has released more information on the new continuing education requirements and online application system it has been readying for tax preparers in time for next tax season.

The IRS announced some of the new rules earlier this week (see IRS Readies Tax Preparer Education System). However, the new regulations were not directly linked or easy to find on the IRS’s website. Luckily BNA has posted a copy of the new regulations here.

The regulations contain some eye-opening (not to mention wallet-opening) information on the preparer community and the number of continuing education providers currently serving them.

“Approximately 500 continuing education providers are currently approved to provide continuing education programs for the approximately 50,000 enrolled agents, enrolled actuaries and enrolled retirement plan agents who must complete continuing education currently, but the IRS and the Treasury Department estimate that there are 2,250 continuing education providers who will be affected by these recordkeeping requirements and the estimated annual burden per continuing education provider will vary from 5 hours to 5,000 hours, depending on individual circumstances, with an estimated average of 500 hours. The estimated total annual costs resulting from these requirements will be $38,632,500 for all affected continuing education providers.”

That works out to about $17,170 annually per CE provider.

David Williams, the IRS’s director of electronic tax administration and refundable credits, told a group of tax preparers last week in New York that they might want to consider becoming CPE providers to make some money during the off-season (see IRS Prepares Preparers for Preparer Requirements). However, becoming a continuing education provider is apparently not exactly an inexpensive endeavor.

Not only that, but tax preparers will also be subject to some record-keeping requirements of their own, but fortunately they’re not quite as steep in cost.

“The IRS and the Treasury Department estimate that there are 650,000 practitioners who will be affected by these recordkeeping requirements and the estimated annual burden per practitioner will vary from 30 minutes to one hour, depending on individual circumstances, with an estimated average of 54 minutes. The total annual costs resulting from these recordkeeping requirements will be $9,880,000 for all affected practitioners.”

That comes to about $15.20 per practitioner, which almost seems like a bargain, comparatively speaking that is.

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