IRS RELEASES COMPETENCY TEST SPECIFICATIONS; TWO TO THREE HOURS, 120 QUESTIONS

The IRS has released the specifications for the competency test individuals must pass to become a Registered Tax Return Preparer. The specifications identify the major topics that will be covered by the test, which will be available starting this Fall. Although individuals who already have a provisional preparer tax identification number (PTIN) from the IRS do not have to pass the exam until December 31, 2013, they may take the exam at any time once it is available.

The test will have approximately 120 questions in a combination of multiple choice and true or false format. Questions will be weighted and individuals will receive a pass or fail score, with diagnostic feedback provided to those who fail.

Test vendor Prometric Inc. worked with the IRS and the tax preparer community to develop the test. The time limit for the test is expected to be between two and three hours. The test must be taken at one of the roughly 260 Prometric facilities nationwide.

To assist in test preparation, the following is a list of recommended study materials. This list is not all-encompassing, but a highlight of what the test candidates will need to know.

• Publication 17, Your Federal Income Tax
• Form 1040, U.S. Individual Income Tax Return
• Form 1040 Instructions
• Circular 230, Regulations Governing Practice before the Internal Revenue Service
• Publication 334, Tax Guide for Small Business
• Publication 970, Tax Benefits for Education
• Publication 1345, Handbook for Authorized IRS e-file Providers
• Form 6251, Alternative Minimum Tax - Individuals
• Form 6251 Instructions
• Form 8879, IRS e-File Signature Authorization

Some reference materials will be available to individuals when they are taking the test. Prometric will provide individuals with Publication 17, Form 1040 and Form 1040 instructions as reference materials.

The fee for the test has not been finalized but is expected to be between $100 and $125, which is separate from the PTIN user fee. Currently there is no limit on the number of times preparers can take the test, but they must pay the fee each time. Individuals must pass the test only once.

The IRS will notify those preparers who have a testing requirement and provide more details. Once the test is available, preparers who have on-line accounts can use their accounts to schedule a test time and select a Prometric site.

The IRS also posted this further note: At the time the current version of Publication 17 went to press, there were certain tax benefits that had not been finalized and several tax benefits were subsequently extended. See Legislative Changes Affecting the 2010 Publication 17 on IRS.gov for the details needed for study purposes.

COMPETENCY TEST SPECIFICATIONS

Follow the link below to view the Competency Test Specifications.

IRS Return Preparer Test Specifications Download

COMPETENCY TESTING IN OCTOBER

RESULTS IMMEDIATELY AVAILABLE TO APPLICANTS

Representatives from the IRS Return Preparer Office told participants at a recent SB/SE National Practitioner Forum that competency testing will not be available until October 2011. The IRS originally said testing would begin in September. They also said that the test results will be immediately available, before the test-taker leaves the testing facility. Preparers with existing PTINs will have until December 31, 2013 to pass the test.

2012 PTIN RENEWALS

The second release of the upgraded PTIN system will occur sometime after September 2011. The IRS changed the renewal cycle for all PTINs to a calendar-year renewal. Open season for 2012 PTIN renewal will begin in October 2011.