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Tax preparation certifications inspire consumer confidence and help tax professionals market themselves to clients. Research the process and requirements for earning yours.
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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.
Certified tax preparers enjoy many career benefits, including increased job security and earning potential. The certification process is a wise investment that can grow your career and help you establish a bigger client base.
Tax preparer salaries are often high, especially for certified public accountants and authorized agents who complete rigorous training courses and exams. Even non-certified preparers can benefit from high hourly salaries if they possess specialized training and experience. Employment in large metropolitan areas often makes for some of the highest tax preparer salaries.
Since the IRS requires Americans to pay their federal income taxes by April 15, most Americans only need tax preparation services in the spring. For the remainder of the year, tax preparers can pursue other professional and personal opportunities while still offering their services to people in need.
An accountant who becomes a tax preparer can offer their services to a larger client base to increase their job security and salary. More clients can also result in positive word of mouth, allowing accountants to build their personal brands faster than if they had not become tax preparers.
Accountants in all specialties can complete professional development courses to learn the latest best practices and laws in the field. Certified tax preparers must complete these courses to keep their certifications active. With an emphasis on lifelong learning, tax preparation professionals always have an in-demand skill set that employers and clients need.
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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.
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:
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.
