Tax professionals must have an IRS issued Preparer Tax Identification Number (PTIN) in order to legally prepare your tax return for compensation. Make certain your preparer has one and enters it on your return.
Enrolled agents, certified public accountants and attorneys have unlimited representation rights before the IRS and may represent their clients on any matters including audits, payment/collection issues, and appeals.
Enrolled Agents (EA) – Preparers with this credential are licensed by the IRS and specifically trained in federal tax planning, preparation and representation. Enrolled agents hold the most expansive license IRS grants and must pass a suitability check, as well as a three-part exam. They complete 72 hours of continuing education every 3 years.
Certified Public Accountants (CPA) – People with this credential are licensed by state boards of accountancy and have passed the CPA exam. They must meet education, experience, and good character requirements established by their boards of accountancy and comply with ethical requirements as well as complete continuing education to maintain an active license. CPAs can offer a range of services; some CPAs specialize in tax preparation and planning.
Attorneys – People with this credential are licensed by state courts or their designees, such as the state bar. Generally, requirements include completion of a degree in law, passage of an ethics and bar exam and on-going continuing education. Attorneys can offer a range of services; some attorneys specialize in tax preparation and planning.
IRS Annual Filing Season Program – Record of Completion Holders - The Annual Filing Season Program (AFSP) recognizes and encourages the voluntary efforts of unenrolled tax return preparers to increase their knowledge and improve their filing season competency through continuing education. AFSP – Record of Completion Holders must meet annual educational requirements set by the IRS and either take and pass an annual tax refresher course or have passed other IRS recognized state or national competency tests such as ACAT's Accredited Business Accountant and Accredited Tax Preparer. (Read more on ACAT credentials below.)
Annual Filing Season Program participants are included in a public database of return preparers on the IRS website. Annual Filing Season Program participants have limited representation rights, meaning they can represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. PTIN holders without an Annual Filing Season Program – Record of Completion or other professional credential will only be permitted to prepare tax returns. For returns prepared and signed after December 31, 2015, they will not be allowed to represent clients before the IRS.
Accredited Tax Advisors (ATA) – These practitioners can handle sophisticated tax-planning issues. Their expertise covers tax returns for individuals, business entities, fiduciaries, trusts and estates, tax planning, and tax consulting. ATAs follow a code of ethics and complete continuing education requirements.
Accredited Tax Preparers (ATP) – These practitioners have a thorough knowledge of tax code and the preparation of individual tax returns. Their expertise covers comprehensive 1040 issues, including supporting schedules and self-employed returns. ATPs follow a code of ethics and complete continuing education requirements.
Accredited Business Accountants/Advisors (ABA) – ABAs have a thorough knowledge and proficiency in financial accounting, financial reporting, financial statement preparation, taxation, managerial accounting, business law, and ethics for small- to medium-sized businesses. ABAs follow a code of ethics and complete continuing education requirements.
Some states including CA, MD, NY and OR require state licensing for tax preparers.
CTEC Registered Tax Preparer (CRTP) – California law requires anyone who prepares tax returns for a fee and is not an exempt preparer to register as a tax preparer with the California Tax Education Council (CTEC). Exempt preparers are California CPAs, enrolled agents (EAs), attorneys who are members of the State Bar of California.
Oregon Licensed Tax Preparers/Consultants – Any person preparing personal income tax returns for a fee or representing that they do so must be licensed by the Oregon State Board of Tax Practitioners. The CPAs, Public Accountants licensed by the Oregon Board of Accountancy and members of the Oregon State Bar who prepare returns for their law clients are exempt from this law. Licensed tax preparers and consultants must pass exams administered by the OR tax board.
Maryland Registration – A registration issued by the Maryland State Board is required to prepare Maryland individual tax returns. Persons who are paid to provide tax preparation services in Maryland must be registered with the Board and must pass the Board’s Competency Examination.
New York Registration – Tax return preparers who are paid to prepare at least one New York State tax return or report must register with the state of New York.