by Sunburst Software Solutions, Inc.
Archives by Month

Is Your CPA REALLY the Right Person to be Completing Your Tax Return?

Print Friendly, PDF & Email



Is your CPA REALLY the right person to be completing your tax return?  Did you know that there are different educational requirements for different types of tax preparers?

Maybe you have heard maybe not.  The IRS is beginning to mandate preparers who complete your tax return.  Yes, if you use a paid tax preparer there are rules that are being mandated by the IRS.  These regulations/rules are being put in place in an effort to assure you that you are getting the best possible return from a knowledgeable trained preparer.

tax preparer educationSo what are they?  What regulations are being implemented to protect you?

  • The IRS will require all individuals who are required to sign a federal tax return as a paid tax return preparer to register and obtain a preparer tax identification number
  • The IRS will establish competency testing for all paid tax return preparers required to register with the IRS except:
    • attorneys,
    • certified public accountants, or
    • enrolled agents
  • The IRS will require 15 hours of annual continuing professional education, including three hours of federal tax law updates, two hours of tax preparer ethics and 10 hours of federal tax law topics, for tax return preparers who are required to register. However, the continuing professional education requirements will not apply to:
    • attorneys,
    • certified public accountants,
    • enrolled agents, or
    • others enrolled to practice before the IRS.

The IRS will place all signing and non-signing tax return preparers under Treasury Department Circular 230.

Wait a minute…

Now I understand why an EA (Enrolled Agent) doesn’t need to be retested or subject to the annual continuing education every year. IRS already requires a very extensive four-part test to become an EA, and Enrolled Agents are required to take 72 hours of continuing education during the 3-year enrollment cycle. CPAs aren’t tested, on tax law, or required to take continuing education covering Tax issues? Attorneys aren’t tested or required to take continuing education covering Tax issues either?

Why not?

The official IRS philosophy is basically one that CPAs and Attorneys are already held to strict guidelines and CPE regulation from their perspective associations and would apply undue responsibilities on them. They say it would be redundant.

A CPA (Certified Public Accountant) once they pass the CPA exam is automatically a tax professional? A newly appointed Attorney who has just past the bar exam is automatically a tax professional?


The Registered Tax return Preparer will be required to complete 15 hours of educational programs annually:

  • 3 hours federal tax law updates
  • 2 hours preparer ethics
  • 10 hours federal tax law topics

Again, Attorneys, certified public accountants are exempt from this.

Okay, I want to point out that each year CPAs, and Attorneys have required CPE that they must maintain regularly so that they can maintain their status; however the CPE isn’t required in the tax law topics or updates. And the Ethics requirement is the same (at least in MO) but the two hours is not yearly but bundled into a three year span. So the Tax Professional who is a RTRP, is required to have six credit hours of ethics, the CPA is only required to have two. And these vary from State to State. Meaning CPA’s are not regulated by the IRS, but by the states they are in. And this means they don’t have to keep up with tax law or the changes to be a CPA.

This is a problem when people are able to prepare your returns and not be required to keep up with tax law changes, or even tax topics in general, and are held with more esteem in regards to taxing issues then those who spend all their time learning all there is about tax to get you the most accurate return prepared that is possible because they have spent the time learning tax law updates along with tax topics. Not to mention they are required to have CPE in tax law and tax law updates.

 Who does your taxes?  Do they know tax law?

6 Responses to Is Your CPA REALLY the Right Person to be Completing Your Tax Return?

    About Your Host:

    Nancy Smyth, Certified QuickBooks ProAdvisor

    Nancy Smyth, Sunburst Software Solutions, Inc.
    QuickBooks Construction & Payroll Expert

    I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.

    QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.

    Top QuickBooks blogs to read in 2018
    We've been selected by TSheets as a Top QuickBooks blog to read in 2018!
    Stay updated!

    Sign up to receive our latest QuickBooks Tips, Tricks & News via email:

    Enter your email address:

    Delivered by FeedBurner

    We promise NOT to sell, rent, or otherwise distribute your name and email address!

    FREE 30-Day Trials

    Request FREE 30-day Trials of QuickBooks add-ons for Certified Payroll, AIA Billing & Payroll Wage Management. Save time and increase accuracy on time-consuming error prone tasks; so you get paid on time!

    Free 30 day trials of QuickBooks integrated add-ons for certified payroll, aia billing and weighted-average overtime

    Certified Payroll Training:
    Learn how to complete a Certified Payroll (Prevailing Wage) Report and fulfill your reporting requirements - 2 hour recorded webinar - $99.99. Click here for more info.

    certified payroll requirements webinar
    QuickBooks Training

    Frustrated with QuickBooks?

    QuickBooks Premier ContractorLearn how to get the MAXIMUM possible results from QuickBooks in your construction business! Visit our new QuickBooks training website, Learn to use QuickBooks in your construction business.

    QuickBooks Time Tracking

    Save 10%/FREE 14-day trial!

    QuickBooks Time Tracker