Recent Tax Updates

Changes to Limited Practice Rights for Unenrolled Tax Preparers and the IRS Annual Filing Season Program

November 12, 2015

The IRS is changing the limited practice rights for unenrolled preparers as of January 1, 2016. Beginning on this date, only unenrolled preparers who participated in the IRS voluntary continuing education program and received a Record of Completion will be able to represent their clients whose returns they have prepared and signed during 2016 before revenue agents, customer service representatives, and similar IRS employees. All other unenrolled federal return preparers will have no representation rights and will only be allowed to complete and sign federal returns.

See the IRS Reminds Tax Return Preparers of Limited Practice Changes news release of October 29, 2015 on the IRS website for more information on this change.

There is still time for unenrolled tax return preparers to complete the continuing education requirements under the IRS Annual Filing Season Program and retain their limited practice rights on returns that they prepare during 2016. In order to receive a 2016 Record of Completion, a preparer must meet the following requirements by the end of the year (December 31, 2015):

  • Complete 18 hours of continuing education which must include:
    • A six hour Annual Federal Tax Refresher course that covers filing season issues and federal tax law updates. The course must also include a knowledge-based comprehensive test (that the preparer must pass) that is given at the end of the course by the continuing education provider.
    • Seven hours of other federal tax law topics
    • Two hours of ethics
  • Renew PTIN
  • Consent to adhere to specific practice obligations outlined in Circular 230, Section 10.51

All continuing education courses must be taken from an IRS approved CE provider and completed by the end of each year.

Unenrolled preparers who passed the Registered Tax Return Preparer Test, are an established participant in a state based return preparer program, are a VITA volunteer, or have met a limited number of other criteria will be considered exempt. This means their continuing education requirement will be 15 hours. See the Reduced Requirements for Exempt Individuals on the IRS website for more details on which unenrolled preparers are exempt and the details of their requirements.

For more information on the IRS Annual Filing Season Program see the following: