Tax Certifications For Professional Tax Preparers

Tax season is a busy time for everyone involved, but it’s especially important for taxpayers in the market for a qualified tax preparer. Tax laws are complex and ever-changing, and it can be difficult for taxpayers to keep up with the latest changes. This is where professional tax preparers come in. Professional tax preparers can help taxpayers to file their taxes accurately and on time, and they can also help them to maximize their deductions and credits and minimize their tax liability. 

However, not all tax preparers are created equal. There are a number of different tax preparer credentials available, and some are more rigorous than others. Tax certification is one of the most important credentials that a tax preparer can have.

What is Tax Certification?

Tax certification is a professional designation that demonstrates a tax preparer’s knowledge and experience in tax law. There are a number of different tax certification programs available, but some of the most well-respected include:

 

  • Enrolled Agent (EA): EAs are federally licensed tax professionals who are authorized to represent taxpayers before the Internal Revenue Service (IRS). EAs must pass a comprehensive three-part examination and meet continuing education requirements.
  • Certified Public Accountant (CPA): CPAs are state-licensed accountants who have met rigorous education and experience requirements. CPAs can provide a wide range of accounting and tax services, including tax preparation.
  • Annual Filing Season Program (AFSP): AFSP Tax professionals are voluntarily enrolled tax professionals who have not met rigorous education required of an Enrolled Agent, but do complete a minimum tax-competency program facilitated by the IRS. AFSP tax professionals are given limited rights to represent before the IRS for the taxpayers whose returns they prepared in a year where they successfully completed the AFSP program. 

Why is Tax Certification Important?

There are a number of reasons why tax certification is important. First, tax certification demonstrates that a tax preparer has a strong understanding of tax law. This is important because tax law is complex and ever-changing, and taxpayers need to be able to trust that their tax preparer is up-to-date on the latest changes.

Second, tax certification can help to protect taxpayers from fraud. There are a number of unscrupulous tax preparers who may try to take advantage of taxpayers or who may not be qualified to prepare tax returns. Tax certification can help to weed out these individuals and give taxpayers peace of mind that their tax return is being prepared by a qualified, professional tax preparer.

Finally, tax certification can help taxpayers to save money. Tax preparers who are certified or licensed often have more experience and expertise, which means that they are more likely to be able to identify deductions and credits that taxpayers may not be aware of. This can save taxpayers a significant amount of money in the long run.

Are there state level tax certifications?

Yes, there are but not in all states. Below are the states and corresponding tax pro designation information: 

California:

New York:

  • https://www.tax.ny.gov/tp/reg/tpreg.htm

Maryland:

  • https://onestop.md.gov/licenses/individual-tax-preparer-5d1540b654f24d03e999844e

Oregon:

  • https://www.oregon.gov/obtp/pages/examrequirements.aspx

Connecticut:

  • https://portal.ct.gov/DRS/Fraud/Tax-Preparers/Hiring-a-Preparer

Iowa: 

  • https://tax.iowa.gov/guidance-tax-return-preparers

 

If you are a taxpayer, here are some additional tips for choosing a tax preparer. Tax certification is an important credential that can help taxpayers to choose a qualified tax preparer. Ask for referrals from friends, family, or other professionals. Check the tax preparer’s credentials, including their certification and experience. Ask for a consultation with the tax preparer to make sure that you feel comfortable with them. Get everything in writing, including the scope of work and the fees.

 


Posted: November 28, 2023

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