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The Competency Exam


Note: Following the Loving ruling and the failure of its appeal, the IRS is no longer requiring tax preparers to take a competency exam. For more information, see "Taxpayers Defeat IRS in Appeals Court."

As part of its efforts to boost the quality of tax preparation, the IRS is now requiring preparers to demonstrate that they meet a certain level of skill, and for many this means passing a recently created competency exam.

THE BASICS
• Taking the test is a one-time requirement; once you pass, you don’t need to take it again.
• Not all preparers are required to take the competency exam – CPAs, EAs and attorneys are exempt, as are supervised preparers and non-1040 preparers. Those who do have to take the test need only pass it once.
• Candidates with a provisional Preparer Tax Identification Number have until Dec. 31, 2013, to take the test. You must have a PTIN in order to take the test.
• The test cannot be taken online; candidates must take it at a test administration center.

For the latest developments on the competency exam, see our Tax News section; for more in-depth IRS resources, visit the links below.

Resources

  • The IRS Competency Exam Page

    The main IRS page on the preparer exam has a ton of resources, including a long list of recommended study materials.

  • Sample Test

    This tutorial test manager Prometric lets you run through a sample exam.

  • Testing Locations

    Find the closest site where you can take the exam.

  • Exam Prep

    The ever-growing IRS list of continuing education providers also notes those who offer exam preparation courses for the competency exam.

  • What to Expect

    This video from test manager Prometric literally shows you what to expect on the day you go in to take the exam.



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