Putting off taking the RTRP test until closer to the deadline may be a bad idea. Or it might mean you simply don’t have to test again after regulatory changes. Or it might mean something in-between that seems to touch the core of the whole issue of registering tax preparers.
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Writes Trish McIntire of McIntire Tax Center in Arkansas City, Kan., on her blog Our Taxing Times, “The RTRP testing started last fall and has been completed by only 4,800 people. The IRS estimates that there are 340,000 preparers who will ultimately need to take the test. To avoid a backlog next year, the IRS is sending out letters to preparers suggesting that they take the test early. The concern is that as we draw closer to the deadline, preparers won’t be able to get a testing time due to backlog at the testing sites. I can understand the procrastination and the IRS’s concern. Few people like taking tests and want to put them off as long as possible.”
David R. Williams, director of the IRS Return Preparer Office, acknowledged in an interview with TaxProToday that a looming exam could, for tax preparers who in some cases haven’t taken a formal exam in years, create “a lot of test anxiety.”
All paid tax return preparers must, among other requirements, pass a one-time competency test by Dec. 31, 2013, and pass a tax compliance check. (CPAs, attorneys and EAs are exempt from the new continuing education and testing requirements, as are non-signing preparers employed by law or accounting firms who are supervised by CPAs, attorneys or EAs, and those who do not prepare the Form 1040 series.)
“But there are only 260 testing centers across the country,” McIntire adds, “each with limited seating available for the RTRP test. It is very conceivable that a last-minute preparer might have to try several sites to find an open time for their testing. Another concern is that the preparer might not pass the first time and might have to take the test again.”
In a recent Wandering Tax Pro blog entry, New Jersey-based tax professional Robert D. Flach admits he is one of the 340,000.
“There are several reasons for my procrastination,” Flach writes. “First, I was not going to be among the first to rush to take the test. There was no doubt that there would be some initial problems with the testing, as there always are, and, if I am forced to sit for the damned thing, I want to make sure the IRS, or rather the test giver, gets it right.”
Flach then echoes other preparers (see “Tax Pros Speak Out on RTRP Regime”) who believe that long experience preparing returns should entitle some preparers to a grandfathering of the RTRP designation without having to take the test. “After preparing taxes professionally continually for 40 years without incident, I have no desire to have to take a test to prove that I know what I have been doing all those years,” he writes. “I am hoping that the IRS will come to its senses, or the process of testing all non-enrolled PTIN holders will prove difficult and will allow grandfathering.”
Flachs adds that he expects to take the test in either early 2013, before the beginning of the tax season and “after I have attended the year-end tax update classes,” or right after the end of the next filing season.
“The Tax Code is always changing,” Flach writes. “Who’s to say that one year after I pass the test the Tax Code will be totally rewritten and most of what I was tested on will no longer apply?”
Barbara Cook, writing recently on the blog of Drake Software about preparing for the exam, says it’s important to put together a study plan. Her tips to get started:
• Select a test prep study course (Drake offers the RTRP Test Study Course and the RTRP Test Tips and Overview courses at discounted prices to its customers, plus 10 CPE credits are available for taking the course and are applicable to the new annual CPE requirement).
• Set a timeframe for studying. Do not procrastinate!
• To prepare for taking the multiple-choice and true/false questions you’ll encounter on the exam, practice by taking a sample test.
• You have until December 31, 2013 to pass the exam and it’s OK to fail it. You’re allowed to retake it until you pass.