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.
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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 www.irs.gov/taxpros/tests 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.”
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.”