AICPA Offers Guidance on Registered Preparer Competency Exam


In a July 7 letter to IRS Commissioner Doug Shulman, the AICPA offered its perspective on the agency’s development of the registered tax return preparer examination. The IRS anticipates that it will begin offering the exam this fall to prospective candidates. 

 

In general, CPAs and employees under their supervision will be exempt from taking the exam. While the exam does not significantly affect AICPA members, Patricia Thompson, chair of the AICPA’s Tax Executive Committee, pointed out the AICPA’s experience with the development and administration of the Uniform CPA exam and its desire to help “craft an examination that measures the requisite level of knowledge and skills required of an entry level tax return preparer.”

 

Under the parameters suggested by the AICPA, the exam would be four or more hours long and divided into two parts—an objective, multiple-choice and/or short-answer portion that covers knowledge of basic tax and Circular 230 topics, and a second section in which the candidate is presented a fact pattern requiring the preparation of a simple tax return. The AICPA further recommended that candidates be permitted to retake the exam 30 days after being notified of the results of a previous test. 

 

The AICPA also recommended that the exam cover:

 

  • Basic compliance issues, as well as addressing fraud, negligence, and the high error rates associated with the earned income tax credit;
  • Preparer and taxpayer penalties; and
  • Problems related to making unethical advertising claims.

 

Overall, Thompson said the exam should “be based on an analysis of the most frequently performed activities and the most common errors by preparers.” She also noted the AICPA’s support for offering the exam in as many languages as the Form 1040 is available but cautioned about unintended changes to the meaning of a question that could result from translations.

 

Also read:

 

More from the JofA:

 

 Find us on Facebook  |   Follow us on Twitter  |   View JofA videos

SPONSORED REPORT

Questions to ask before committing to the cloud

Cloud computing has its pros and cons. In this report, we answer common questions CPAs may have as they consider transitioning partially or fully to the cloud.

QUIZ

News quiz: Experts offer guidance on accounting standards

Take this short quiz to see how much you know about the news, including a couple of SEC announcements, and facts cited in the guidance experts have offered on accounting standards.

CHECKLIST

Auditing risks in culture

Cultural flaws can seriously damage an organization. Here’s how internal auditors can reduce risks by embedding culture audits into existing audit programs.