What Are Tax Preparation Certifications?

Tax preparation certifications are professional credentials that signal authoritative competence to individual taxpayers seeking assistance with their annual tax filings. There is no single, uniform tax preparation certification in the United States. Instead, specific credentials apply to certain professional classes including enrolled agents, certified public accountants (CPAs), and tax attorneys.

Importantly, only enrolled agents (EAs), certified public accountants (CPAs), and tax attorneys can represent clients in direct dealings with the Internal Revenue Service (IRS). The IRS operates a Registered Tax Return Preparer (RTRP) program. However, the RTRP credential does not necessarily indicate that the professional holding it can provide representation before the IRS.

This guide primarily focuses on the three professional classes that hold full IRS representation rights: enrolled agent, CPA, and tax attorney. It explores the benefits delivered by their professional credentials and examines available paths for obtaining them.

How Do You Qualify for Tax Preparer Certification?

Tax preparers fall into one of two categories: limited or unlimited representation rights. Those with limited representation require no license or certification, but they can only work with clients whose tax returns they personally have completed and signed.

Tax preparers with unlimited representation rights can take new clients regardless of who signed their tax returns. These professionals can also handle audits and appeals for their clients.

To hold unlimited representation rights, tax preparers must earn certification as EAs, CPAs, or attorneys. Each of these career paths requires candidates to pass an exam and acquire an IRS preparer tax identification number (PTIN).

However, educational, professional, and examination requirements for these career paths vary, sometimes depending on location.

Educational Requirements

Enrolled agents do not need any particular degree or educational credentials. Instead, they usually gain enrolled agent status by passing a rigorous three-part exam issued by the IRS. They can acquire the knowledge needed to pass the exam through professional experience, or by completing a postsecondary degree or program in accounting or a master's in taxation.

CPA educational requirements vary by state, but they typically include:

• Postsecondary education that covers at least 150 semester-hours or the equivalent
• At least a bachelor's degree
• A strong concentration of accounting coursework

Note that most states do not specifically require CPAs to hold accounting degrees. Instead, they must meet detailed educational requirements that cover intermediate and advanced accounting concepts.

Tax attorneys must complete law school and pass a rigorous examination issued by a state-level bar association. They can satisfy educational requirements with either a juris doctor (JD) or master of laws (LLM) degree. Note that many LLM programs restrict admissions to applicants who already hold JDs.

Professional Requirements

You can become an enrolled agent without professional experience by passing the three-part Special Enrollment Exam (SEE) issued by the IRS. However, you can also follow an alternative, experience-based path. This path requires you to have a minimum of five years' experience working for the IRS in any capacity that involves interpretation of taxation statutes.

As with educational requirements, CPA experience requirements vary by state. In general, a person seeking CPA licensure must have at least one year (1,800–2,000 hours) of professional experience in accounting. You must usually obtain that experience working under the direct supervision of a licensed CPA. Candidates must also pass the challenging four-part Uniform CPA Examination.

Most jurisdictions do not require candidates for the bar examination to have any particular type or amount of professional experience. However, insiders commonly note that earning professional experience as a paralegal, legal assistant, law clerk, or researcher can help. State bar examinations are very difficult, and insights gained from professional experience may improve your chances of passing.

What Are Certified Tax Preparer Exams?

Apart from attorney bar exams, the two available tax preparer exams are the SEE for enrolled agents and the CPA exam for CPAs.

EAs strictly represent taxpayers. CPAs can work as tax or financial advisors. The corresponding exams reflect these differences. The entire SEE covers information found only in the regulation section of the CPA exam. Even so, the SEE includes dozens of in-depth tax return topics.

Some international candidates qualify for the shorter international qualification examination instead of the standard CPA exam.

The more comprehensive CPA exam may appeal to people who have already taken higher education courses in accounting and are interested in accounting and tax preparation. Individuals solely interested in tax preparation, audits, representation, and tax planning may prefer the SEE. Candidates may even first pursue EA certification, then become a CPA later on.

How Can You Prepare for Certified Tax Preparer Exams?

As with any certification exam, the best way to prepare for the SEE or CPA exam is to start early. The National Society of Accountants recommends at least 50 study hours for each section of the SEE, totaling 150 hours. Prospective CPAs can apply the same rule to the CPA exam. However, the CPA exam covers more material over four sections, so test-takers may want to set aside 300-400 hours.

Practice Exams and Study Resources

Frequently Asked Questions About Tax Preparer Certification

Which professional roles can also be tax preparers?

Anyone with a PTIN can work as a tax preparer. Attorneys and certified public accountants automatically become tax preparers with unlimited representation rights upon receiving licensure from their state. Enrolled agents, licensed by the IRS, can also be tax preparers.

How do I become a licensed tax preparer?

The credentials for certified tax preparers vary. Licensed attorneys need no extra credentials. Individuals looking to work as tax professionals can either become a CPA or an enrolled agent. EAs only need to pass the SEE, while CPAs need to pass the Uniform CPA Examination and complete educational and professional requirements set by their state.

What is the difference between a CPA and a certified tax preparer?

A CPA holds unlimited representation rights as a tax preparer. They can specialize in tax preparation or focus on financial advisory and accounting. Other certified tax preparers — like enrolled agents — focus exclusively on tax preparation. Both CPAs and EAs hold the same rights before the IRS, but their focuses may differ.

How many times can I take the tax certification exam?

EA candidates can take any part of the exam four times in each testing window (typically May to February). Individuals can retake the CPA exam as many times as needed, but most states expect candidates to pass each section within 18 months.