I recently wrote about the forthcoming IRS Registered Tax Return Preparer (RTRP) competency test on Taxes and Stuff.
I promised that the Registered Tax Return Preparer competency test would be available in October 2011. Only a month behind schedule, the IRS announced that the competency examination is available as of the end of November. :)
Well, now everyone wants to know – exactly how many questions will the test include, where do we take it, and how do you study for it? Read on for answers to these and other questions.
What Will the IRS Registered Tax Return Preparer Competency Test Be Like?
The competency exam will include 120 questions with an estimated completion time of 2.5 hours. The exam’s focus will be Form 1040 and related schedules, but the test will also include an ethics portion.
How Should You Study for the RTRP Exam?
You can fork over some cash for a study guide, but you should know that since no one has taken the test yet, the study guides are just educated guesses for now.
On its website, the IRS broadly lists forms and publications recommended for review, but it also goes one step further and clarifies the types of knowledge test takers will be expected to have. While not all-inclusive, these IRS test specifications would be a good starting point for any prospective examinee. I would recommend becoming familiar with all the items on this list before even thinking about sitting for the exam. I’d wager that a firm grasp of this knowledge alone will either get you a passing grade or very close to it.
If you don’t want to purchase one of the many study guides available online, the test specifications cheat sheet, along with a thorough review of the recommended forms, instructions, and publications, may be enough to help you pass the exam.
Here are links to both resources again for easy reference:
Never Taken a Prometric Exam Before? Here’s a Sample Test Experience
Prometric administeres computer-based exams. Testing center exam stations aren’t all that different from what you would see at the DMV. If you want to get a feel for what you will be looking at on screen, you can test-drive the general Prometric exam experience online.
The following link takes you to a sample test that helps you visualize what you will see at the testing center (how to scroll from page to page, how the questions are explained, etc). It doesn’t give away any hints, however. The sample questions are, “What color is the sky,” for example.
Prometric Testing Experience Example
How Much Does the Registered Tax Return Preparer Test Cost?
The fee for the exam is $116. Part of the fee goes to the IRS; part of it goes to Prometric.
Where Can You Take the Test?
According to the IRS, it will eventually roll out the test to all of Prometric’s U.S. testing centers, but it isn’t currently clear when that will happen. For now, it is only available at certain locations. You must search on the Prometric site to find out the closest one to you.
Currently, you cannot register for a test until you register for a PTIN (a Preparer Tax Identification Number), so that should be your first step. You can register online or by filing IRS Form W-12, IRS Paid Preparer Tax Identification Number.
What is the Deadline to Pass the Exam?
Current PTIN holders have until December 31, 2013 to pass the exam. That seems like a long time; however, don’t forget that you will likely have to pay the $116 exam fee each and every time you take the test, so the timeframe really is irrelevant unless you have buckets of cash on hand.
New IRS Preparer Requirements Will Continue to Evolve
The IRS is taking its time to perfect the requirements for RTRPs before rolling out each step. It started with PTIN applications required for fee-based 2011 tax return preparation and now includes testing for certain individuals. Coming soon are continuing education requirements and background checks for some applicants.
Here are a couple of things to keep in mind about pending IRS preparer requirements:
- Registered Tax Return Preparers may be subject to future background check requirements, including fingerprinting.
- Anyone not specifically exempted from continuing education (CE) requirements (explained here) will have to obtain 15 hours of CE annually. This will include 2 hours of ethics, 3 hours of federal tax law updates, and 10 hours of other federal tax law courses.
For information about the new IRS tax preparer requirements, see these related articles:
IRS PTIN Registration – Who Needs a Preparer Tax ID Number? – A more in-depth look at who is and isn’t required to get a PTIN.
New IRS Tax Preparer Requirements – A little bit of background info and explanation of why the IRS believes PTINs are necessary.
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