IRS RTRP Exam (Registered Tax Return Preparer Practice) Detailed Information
Registered Tax Return Preparer (RTRP
) Test Fee Refunds – Frequently Asked Questions
1. Why is the IRS refunding RTRP
The United States Court of Appeals for the District of Columbia Circuit upheld the decision of the District Court in Loving v. IRS, that the IRS lacked authority to mandate competency testing for paid tax return preparers. As a result, the IRS is refunding the test fees to people who took the Registered Tax Return Preparer test.
2. I paid the fee and took the RTRP
test. Do I need to take any action to claim my refund?
No action is necessary. Letter 5475, RTRP
Refund Notification Letter, will be mailed approximately May 28, 2015, to people due an RTRP
test refund. Refund checks will be mailed separately approximately June 2, 2015.
3. I received a Letter 5475, RTRP
Refund Notification Letter, and I have not received a refund check yet. When will I receive it?
Refund checks will be mailed separately on June 2, 2015. Please allow until August 2, 2015 to receive your refund.
If after August 2, 2015, you still have not received your refund, please call the IRS number on your Letter 5475.
4. What address is the IRS using to mail checks?
Letters and checks are being mailed to the return preparer’s address in the Preparer Tax Identification Number (PTIN) system.
5. What if I took the test more than one time? Will I receive multiple refunds?
If you took the test more than once, you will receive one refund for the total test fees paid ($116 per test attempt). You will not receive a refund for any fees that were previously refunded by Prometric.
6. What about other expenses, such as continuing education, gas/travel, and hotel bills? Can I be reimbursed for those costs as well?
No, only the $116 test processing fees will be refunded.
7. Is this refund taxable to me?
Whether this amount is income depends upon a number of factors, including whether the amount was deducted previously as a business expense. See Publication 334, Chapter 5 under “Other Income-Recovery of Items Previously Deducted” for more information.
8. Can I keep my RTRP
Yes. However the RTRP
Certificate is no longer valid and serves no purpose when dealing with the IRS.
Beginning January 1, 2016, in order to have limited representation rights for clients, you will need to participate in the Annual Filing Season Program.
Anyone who passed the RTRP
test only needs to meet their original 15 hour continuing education requirement each year to obtain an Annual Filing Season Program – Record of Completion.
9. I paid the RTRP
test fee for employees of my tax business. Who will receive the test fee refund?
Refunds must be issued to the person who took the test. Third parties who paid test fees will need to resolve any reimbursement issues directly with the person who took the test.
10. What is the number in the memo section on the front of the check?
The number listed on the face of the check in the memo section is a file number that is used for identifying the refund check; this number can be 2-7 digits and helps us in researching questions that refund candidates have about their check.
11. Does the IRS plan to implement another competency test program in the future?
The IRS remains committed to the principle that all persons who prepare federal tax returns for compensation should be required to pass a test of minimal competency and take annual continuing education training. Taxpayers deserve top-quality and ethical service from all tax professionals. As part of this commitment, the IRS launched an interim Annual Filing Season Program in 2014 to promote voluntary continuing education by non-credentialed tax return preparers.
The President’s 2016 budget proposal would provide the IRS with authority to regulate all paid tax return preparers. Oversight of all paid preparers, coupled with diligent enforcement, would promote high-quality services from all tax professionals, improve voluntary compliance and foster confidence in the fairness of the U.S. tax system.
12. I did not receive a Letter 5475, but I believe I’m due an RTRP
test fee refund.
If you scheduled the RTRP
test and paid the test fee prior to January 18, 2013, and did not receive a Letter 5475, please contact the IRS at 913-722-7606 and leave a brief message indicating the reason for your call (i.e. you are eligible for an RTRP
test fee refund but did not receive a letter 5475). The message should include the following:
Your full name
Current daytime phone number where you can be reached during normal business hours
Please allow 3-5 business days for a response from the IRS RTRP
Testing contact phone center. This phone number is only for questions about RTRP
test fee refunds. Calls about other issues will not be returned.
Registered Tax Return Preparer Test Explained
FS-2011-12, November 2011
The Internal Revenue Service currently is implementing an oversight program to increase the quality of the tax preparation industry and to improve services to taxpayers. This program requires all paid tax return preparers to register with the IRS each year and have a Preparer Tax Identification Number (PTIN).
Certain tax return preparers who prepare the Form 1040 series returns must take additional steps. These preparers must pass a one-time competency test, a tax compliance check, and a suitability check. Preparers who meet these requirements will be given a new designation: Registered Tax Return Preparer. Additionally, they must complete 15 hours of continuing education each year, starting in 2012.
Currently, PTINs are issued with either an active or provisional status. Active PTINs are given to Enrolled Agents, Certified Public Accountants and attorneys, among others, because these individuals are not required to take the competency test. Tax return preparers who must pass the competency test are given a provisional PTIN. These individuals have until Dec. 31, 2013, to pass the test.
Competency Test Overview
The fee for taking the Registered Tax Return Preparer competency test is $116. The test is a timed, 2½ hour exam that will cover the Tax Year 2010 Form 1040 series and its related tax schedules. There are 120 questions in a combination of multiple choice and true or false formats. Test takers cannot bring any resource materials but they will have access to the Form 1040, Form 1040 instructions, and Publication 17, Your Federal Income Tax.
The test is available in English only at this time and generally will be administered in a computer based testing format. The test must be taken at Prometric Inc., test centers. Prometric will eventually offer the test at more than 260 domestic centers nationwide, but it is not available at all locations currently. Those who initially do not locate a nearby test site should check back because additional test sites will be added daily.
There is no limit on the number of times the test can be taken, but preparers must pass the test only once. If an individual takes the test more than once, the $116 fee will apply each time the individual takes the test.
Initial test takers won’t receive their test scores for two to six weeks to allow the IRS to validate the exam and determine the pass/fail cutoff. Once validation is complete, around mid-January, those taking the computer-based test will receive their scores at the test center immediately upon completing the test.
Who Must Take the Registered Tax Return Preparer Test
A paid tax return preparer must take the Registered Tax Return Preparer competency test and meet the other requirements for becoming a Registered Tax Return Preparer unless the tax return preparer is a:
Certified Public Accountant, attorney, or an Enrolled Agent;
Supervised preparer, which is an individual who:
Does not, and is not required to, sign a tax return as paid preparer,
Works at a firm at least 80 percent owned by CPAs, attorneys or Enrolled Agents, and
Is supervised by a CPA, attorney or Enrolled Agent
Preparer who does not, for compensation, prepare, or assist in the preparation of, all or substantially all of any Form 1040 series return. For purposes of this exemption, Forms 1040-PR and 1040-SS are not Form 1040 series returns.
Paid tax return preparers will be notified by the IRS of their test requirement either in their welcome letter if they are obtaining a new PTIN or in their “next steps” notification when they renew their PTINs.
Preparing for the Test
The IRS has released test specifications which outline the general individual income tax topics that will be covered by the exam. The IRS also has released a list of publications and instructions from which the test topics were taken. The test specifications and publications, as well as a tutorial, a video on what to expect test day, and a Candidate Information Bulletin, are available at www.irs.gov/taxpros/tests.
Because the test will cover 2010 tax issues, the IRS encourages preparers to download the publications and save them to their computers so they can be sure they have the correct tax year as a study guide.
What Certifications Does a Tax Return Preparer Need?
The Internal Revenue Service issues preparer tax identification numbers (PTINs) to anyone authorized to legally prepare — and defend — tax documents for individuals and companies. But there are credentials beyond the PTIN providing tax return preparers additional representation rights. For individuals interested in becoming a tax preparer, understanding the tax preparation requirements will help them achieve the career they're interested in pursuing. The certifications include:
An enrolled agent is a registered tax return preparer required to pass a suitability check, take an extensive test covering individual and business taxes as well as representation issues, and undergo 72 hours of additional education every three years. They have the most extensive licensing provided by the IRS, valid across the entire country.
Certified Public Accountants
CPAs are licensed by states or U.S. territories, and must pass the Uniform CPA Examination. Each state or territory establishes additional tax preparation requirements like education and review of certification requirements as well. Many CPAs will specialize in tax planning or preparation of returns.
Attorneys must be licensed by a state court or state bar after having earned a law degree and passed the bar exam. Not only are attorneys a registered tax return preparer, they also can prepare a legal defense for a client involved in a tax-related court case, even for taxes they did not prepare.
The IRS had a program providing Registered Tax Return Preparer certification to certain preparers. However, this program is no longer enforced due to a February 2014 decision by the U.S. Court of Appeals for the District of Columbia Circuit Court finding that the IRS has "insufficient statutory support for the IRS' regulation of federal tax return preparers." Read More.
Registered Tax Return Preparers
The IRS had a program providing Registered Tax Return Preparer certification to certain preparers. However, this program is no longer enforced due to a February 2014 decision by the U.S. Court of Appeals for the District of Columbia Circuit Court finding that the IRS has "insufficient statutory support for the IRS' regulation of federal tax return preparers."
Once certified, tax return preparers often invest in cloud-based software programs like Intuit Tax Online or Intuit ProConnect Lacerte Tax that help provide their clients with better accuracy and quicker service. Both programs are excellent for tax preparers of any certification level.