Boost or Burden?

Enrolled Agents debate taking the RTRP test


The IRS’s new RTRP test -- and the service’s long-promised public-awareness campaign to promote the new designation -- has many Enrolled Agents considering taking the test for what is, for them, a lesser designation.

In general, EA numbers are growing, according to the IRS, which reports a spike in the number of tax professionals scheduling and taking the Special Enrollment Exam this year. There were 6,463 SEE tests administered between May and July (a 73 percent jump from 2011) and 6,030 future SEE appointments were scheduled between May and July (a 47 percent increase from 2011). 

EAs, like CPAs and attorneys, are not required to take the RTRP test. Nevertheless, some EAs and those about to become EAs are considering taking the test anyway.

In our story on marketing tax preparer designations earlier this summer, EA Trish McIntire of Arkansas City, Kan.-based McIntire Tax Center spoke for many EAs when she said that she’d consider the RTRP exam if she had to explain to too many potential clients how she didn’t have to take the test. Blogger Robert D. Flach also presents an interesting scenario about greater public awareness of RTRPs versus EAs in an entry from late 2011 on The Tax Professional.

And on its Facebook page announcement about the recent spike in SEE schedulings and appointments, the IRS Return Preparer Office itself wrote, “Remember, certain preparers must take either the Registered Tax Return Preparer test or the SEE. Check out to see which one works for you.” 

Amy Paz, owner of Paz Bookkeeping and Tax Services, Antioch, Tenn., recently raised the question on the National Association of Tax Professionals discussion group on LinkedIn. “I know EAs are exempt from taking the RTRP examination but some still take it anyway. I'm currently in the process of becoming an EA but I was wondering if I should also take the RTRP exam. As an EA, what are the benefits of also having the RTRP designation?”

In response, some EAs, like Bill Stewart with San Juan Financial in 

San Juan Capistrano, Calif., declared there was no need or “benefit” to EAs in taking the test. “Some are taking it just to know what is in the test,” Stewart added.

“There's no reason for an EA to also go for the RTRP other than additional letters behind the name,” said EA Carrie Corcoran, owner of All Notary and Tax Services in the Reno, Nev., area. Added Matthew Bostick, owner of Piedmont Tax Service in Piedmont, S.C., “If you pass the SEE, then you don't need to take RTRP. The only advantage to taking it is in case you don't pass SEE the first time, then you are set for preparation and it would be good practice for the SEE test.”

Potential RTRPs have until Dec. 31, 2013, to test. The IRS has estimated that some 340,000 preparers will eventually have to test to continue to prepare returns for pay, but many have yet to even schedule an appointment at one of 260 testing centers nationwide -- which could mean a flood of last-minute testers even before EAs try to secure a spot.

“An EA taking the RTRP is like a medical doctor taking a paramedic exam or a lawyer taking a paralegal exam,” wrote EA Lennox Boush, a tax practitioner at Heritage Income Tax Service in Portsmouth, Va. “If you are both an RTRP and an EA, you will have two sets of criteria to meet every year and two sets of paperwork to do every year. That's a lot of extra hassle and possibly additional expense. There are also restrictions in advertising on promotions that are required of an RTRP that do not exist for EAs.”


Acronym recognition

The IRS push of the new designation has also caught the attention of some EAs, and “RTRP versus EA” should alarm any EA's marketing department, said Van Lanier, owner of NOVA Accounting and Tax in Herndon, Va. “Search for the term ‘RTRP’ on Google,” he wrote. “‘RTRP’ has a page one, rank one link to the IRS Web site about RTRP, followed by a page of links to other RTRP information. Search for ‘EA.’ Nothing pertaining to us on page one. EAs are invisible to anyone searching the Internet for what we say the letters EA stand for. As the IRS begins its publicity campaign to make the RTRP designation known, it makes little sense for IRS to promote EAs. Sure, there will be end-of-story disclaimer language about EAs, CPAs and attorneys being excepted, but the focus of the IRS press releases and seminars aimed at wage earners and the self-employed will be if your tax preparer is not an RTRP, beware."

“We EAs have a lot of fast work to do in the name-recognition department as competition heats up and is pushed forward by IRS,” Lanier added.

Other EAs in the group, however, saw benefit in passing both tests.

“Due to the upcoming deadline and massive backlog of preparers that haven't taken the test yet, get the RTRP done now,” wrote EA Kathryn Morgan with H&R Block in the Shreveport, La., area, on the general topic of initial EA candidates taking the RTRP test. “The IRS can't help but put more manpower on processing the RTRP licensing than the EA because of the drop-dead [deadline], so even if you pass all three parts of the EA, you may not get licensed before 2014.”

Lon Goforth with Proven Practice Strategies, a tax-practice marketing company in East Lansing, Mich., said that preparers are competing for clients: “It is very important that the professional have the ability to demonstrate as much professional competency as possible … It would be very beneficial to have and use both the EA and RTRP designations, definitely a ‘can't hurt, might help’ situation … The EA plus the RTRP designation might give you a competitive edge.”

Las Vegas-area EA Shirley Callahan recently took the RTRP exam. “In my opinion, the test is written in third-grade language with simple tax theory,” she wrote. “Being able to tell my clients of its simplicity is well worth the $116 to take the test. I have one EA friend who passed the test without studying. I did review the NATP textbook for 15 hours just prior to taking the test. I finished the test with an hour to spare, and the online Pub. 17 was useless because it has no searchability.” 

Comments (8)
You will have no trouble getting into a Prometric Test site but if you want to pass the test, go somewhere else. Has anyone else out had experience with Prometric?
Posted by | Saturday, December 29 2012 at 9:26AM ET
I have been practicing for over 20 years but never in a situation where I could get a CPA designation. Now the new law gives us an opportunity to show a level of professionalization that we did not have before. I have already passed the RTRP test and put it proudly on my business cards.

This summer and fall I have been giving RTRP test preparation session two nights a week for two hours each session using material provided by Fast Forward Academy. Each session goes through a series of sample questions and I encourage discussion before, and after, being shown the answer.

Next week, I am including EA candidates in the test preparation sessions. I have found that the material, sample questions and practice exams to be practically the same for the RTRP candidate and the EA candidate for Parts 1 and 3. I am now encouraging all candidates to pursue both the EA and RTRP designations. As you are training for the EA tests, you can take the RTRP test along the way.

A major concern is going to be the great difficulty to get into a Prometrics test center next Summer and Fall. Therefore, I am strongly encouraging anyone in hearing distance to test NOW. Finally, I have passed Part 3 of the EA series and will take the other two parts before tax season begins in January. Also, I will (when approved) proudly display both the EA and RTRP designations on my business cards.

Steve Hughes, RTRP Albuquerque, NM
Posted by FINANCEXPR | Friday, September 28 2012 at 3:34PM ET
VAEA22601, your premise that all Enrolled Agents will automatically be RTRPs is incorrect. You are looking at the process NOW and expecting it to remain the same after December 2013. Enrolled Agents will not be RTRPs (unless they choose to take the RTRP exam).

You also don't seem to have been paying attention this past year, as David Williams was promoting Enrolled Agents quite extensively. Hopefully his successor will continue to do so.
Posted by bridgman | Tuesday, September 18 2012 at 4:38PM ET
I think it is another way for the government to make more money. I never wanted to be an EA. Anyone that passed that test good job. The IRS should be advertising EA as much more experience and RTRP as someone who is registered with the IRS. This whole thing is crazy. Who are the ones commiting crimes? You have a story about a lawyer who does tax work? We are not all the same and we should not be.
Posted by LINDA-TODD | Tuesday, September 18 2012 at 12:14PM ET
There has been no discussion here about the role of the related professional organizations that have responsibility for promoting the Enrolled Agent status as having more rigorous testing standards as well as more stringent ethical and professional standards in operation of their practice - for example the Society of Enrolled Agents or the National Association of Tax Preparers (NATP). This is a matter that needs to be brought to the attention of the leadership of these organizations by their members.
Posted by DukeUgrad | Thursday, September 06 2012 at 4:52PM ET
The guidelines is very clear that RTRP has a very limited practice before the IRS as compared to EA. Yes, it is easy for them to pass the RTRP test. For them it is only a little fraction of what they underwent to become an Enrolled Agent. The final outcome of EA passing the RTRP, is that, they have to pay both renewal fees to be active on both profession. No conflict. Good Luck
Posted by nessie | Wednesday, August 29 2012 at 1:59PM ET
I think that many are missing the big picture. With the exception of those who attain the status of Enrolled Agent prior to Jan 1, 2014, everyone who becomes an Enrolled Agent after Jan 1, 2014 will be both an RTRP and an EA automatically.

After Jan 1, 2014 you will need a PTIN to register to take the EA test. To get a PTIN you have to pass the RTRP test. By the end of 2016 the consumer is going to expect their EA to also be an RTRP. It will be the new norm. They are going to look at any EA who is not also an RTRP as being less qualified.

It is all about public perception. There are a finite number of taxpayers who need service. The great "unwashed" public is going to seek out the service provider with the greatest name recognization. The IRS is going to make certain that the term RTRP receives wide recognization by the public. As Van Lanier pointed out, you have to search really hard to find out what an Enrolled Agent does.

In the long run I don't think that the IRS cares about pushing the Enrolled Agent status because IRS employees generally don't know what they are and as I said in the beginning, in the long run every new Enrolled Agent is going to be an RTRP anyway.

In case you haven't figured it out the primary reason that the IRS wants every preparer registered is to use that as a means of raising money from the mass of preparers who will wonder outside the lines and wind up subject to Cir 230 penalties and sanctions.

The IRS Commissioner and his staff pledged to Congress that they would raise an average of 8-14 million dollars per year in new preparer penalties to pay for the 8000 new auditors and support personnel that they were authorized several years ago.
Posted by VAEA22601 | Tuesday, August 28 2012 at 12:25PM ET
What irratates me is having to pay every year for renewal and then have to pay for my EA renewal.
Posted by 235court | Tuesday, August 28 2012 at 11:55AM ET
Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.

Subscribe to the Tax Pro Today newsletter
Register now for FREE site access and more