What Are Tax Preparer Certifications?
Key Takeaways
- There are several common tax preparer certification pathways: earning a credential from professional organizations, passing the Uniform CPA Examination for CPAs, taking the IRS Special Enrollment Exam for enrolled agents, or completing the bar exam for tax attorneys.
- Enrolled agents, CPAs, and tax attorneys have unlimited representation rights. They can represent clients on any matters before the IRS. Seasonal tax preparers with certifications have limited representation rights, while uncertified workers can only file tax returns.
- Tax preparation credentials and requirements vary by state.
All tax preparers in the United States must have a preparer tax identification number (PTIN) from the IRS, which costs $19.75. However, PTINs are not the same as certifications or licenses, and don’t grant you any representational rights for clients whose taxes you file.
Tax preparer certifications distinguish you as a tax authority and give you the legal right to serve clients with tax needs beyond filing taxes. There isn’t one single tax preparer certification. Instead, you can become certified by passing the required exams that correspond to your desired profession. The main pathways to a certification-based tax preparation career are enrolled agents (EAs), tax attorneys, and certified public accountants (CPAs).
Enrolled agents, CPAs, and attorneys are all certified tax preparers with unlimited representation rights, meaning they can represent clients before the IRS regarding any tax matter.
The Accreditation Council for Accountancy and Taxation (ACAT) offers several certifications that can bolster your professional credibility, including the accredited tax preparer (ATP) and accredited business accountant (ABA) credentials.
Additionally, the IRS runs the Annual Filing Season Program (AFSP), which grants participants limited representation rights. These professionals can only represent clients if they personally filed the client’s taxes, and they can only represent these clients before revenue agents, the Taxpayer Advocate Service, customer service representatives, and similar employees at the IRS.
To qualify for this program, tax preparers must complete the initial AFSP course and exam. Additionally, they must take an Annual Federal Tax Refresher course and exam each year to maintain their status. Holding ATP or ABA certifications from ACAT exempt workers from these renewal requirements. However, all ASFP tax preparers, even those with ACAT certification, must complete continuing education hours annually.
Why Get Certified as a Tax Preparer?
Unlimited Representation
Holding certification or licensure as an EA, CPA, or tax attorney gives you unlimited representation rights for clients going before the IRS. Note that you can only represent your client in a court of law if you are an attorney.
Job Security
Society has a perpetual need for tax experts, so working as a tax preparer can be a stable, lucrative side hustle. Earning certification can demonstrate your expertise and attract more clients.
National and Global Recognition
Getting certified as a tax preparer establishes credibility in national and international contexts. EA licenses are valid nationally. The CPA certification carries global recognition, despite originating in the United States. CPA exams are even offered internationally.
How Do You Qualify for Tax Preparer Certification?
Each career path that leads to tax preparer certification has different educational and experiential requirements. These roles all have their own certification exams, and states maintain their own additional requirements. If you want to work as a CPA outside of the U.S., you may need to follow different requirements for other countries.
Education Requirements
- To earn an ATP credential from ACAT, you must be at least 18 years old and complete the ATP exam. To earn the ABA certification, you need either three years of professional experience or one year of experience plus two years of college-level accounting coursework.
- You do not need a college degree to earn an EA license from the IRS. The only requirement for this credential is completing the rigorous three-part Special Enrollment Exam (SEE). The test’s sections cover individuals; businesses; and representation, practices, and procedures. You can waive this requirement if you have IRS-specific experience.
- To become a CPA, every state requires you to complete a minimum of 150 semester credits of college-level education and earn at least a bachelor’s degree that covers foundational accounting coursework. You also need to complete the four-part CPA exam. Additional education requirements vary by state.
- To become a tax attorney, you must earn a bachelor’s degree and complete a law degree — either a JD or LLM — with a specialization in tax law. You must also pass the bar exam for the state where you want to work, then apply for licensure. License requirements vary by state.
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Professional Requirements
- To earn an ATP credential, you don’t need professional experience. However, to earn an ABA certification, you need at least three years of professional experience, or one year of experience plus two years of college-level accounting.
- You don’t need professional experience to become an EA. However, former IRS employees with five years of experience in taxpayer-facing roles may be able to waive the exam requirement.
- CPA experience requirements vary by state. Generally, you need at least one year of CPA-supervised work experience in accounting, often defined as 1,800-2,000 hours. This experience must cover accounting, tax consulting, attestation, or compilation practices.
- You do not need professional experience to take the bar exam. However, gaining professional experience as a paralegal, law clerk, or legal researcher can give you valuable insights into law careers. The knowledge you gain on the job may even improve your chances of passing the bar exam.
How Should I Become a Certified Tax Preparer?
To determine which path to certification is right for you, consider the time and money you want to spend on your education, the overall return on your investment, and the type of work you wish to pursue.
EAs only need to pass the SEE test to earn their license. If you are a former IRS employee, you may be able to waive the certification exam requirement. CPA and tax attorney pathways are more rigorous and costly, but can lead to careers with higher-than-average wages.
If you merely want to work as a tax preparer, keep in mind that you do not need certification — just a PTIN. By participating in the IRS AFSP or earning ABA/ATP credentials from ACAT, you can offer limited representation rights to clients.
Frequently Asked Questions
The best course to become a tax preparer depends on how much time, money, and effort you want to invest in the process. You can become a registered tax preparer before the next tax season, while becoming a CPA or attorney can take 5-8 years.
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