Although the IRS has positioned the Annual Filing Season Program (AFSP) as a voluntary program for tax preparers, the IRS is implementing limits to representation rights for un-enrolled tax preparers who do not participate in the program. While anyone with a preparer tax identification number (PTIN) can continue to prepare tax returns for compensation, a PTIN-only preparer will not have representation rights after calendar year 2015.
Limited representation rights for non-AFSP participants
Beginning January 1, 2016--changes to representation rights
If you have a PTIN and AFSP
Tax preparers with a PTIN will have limited representation rights before limited offices of the IRS with respect to clients whose return they prepared and sign January1, 2016 or later.
AFSP record of completion participants can represent clients whose returns they prepared and signed, but only before:
- revenue agents,
- customer service representatives,
- the Taxpayer Advocate Service
- and similar IRS employees.
If you have a PTIN, but not AFSP
Beginning in 2016 only AFSP participants who obtain a Record of Completion will have those limited representation rights before the IRS for clients whose returns they prepared and signed. PTIN holders without an AFSP - Record of Completion or without other professional credentials will not be able to represent clients before the IRS in any matters and will only be permitted to prepare tax returns.
The new rules limiting representation rights apply to both 1040 and non-1040 preparers. All preparers will need an AFSP Record of Completion for returns completed after December 31, 2015 to engage in limited practice.
Unlimited representation rights
Attorneys, CPAs, and enrolled agents will continue to be the only tax professionals with unlimited representation rights, meaning they can represent their clients on any matters including audits, payment/collection issues, and appeals.
What is the Annual Filing Season Program (AFSP)?
The IRS started the Annual Filing Season Program in July 2014. The purpose of the program is to encourage all non-credentialed (not EA/CPA/Attorney) tax preparers to take continuing education (CE) courses so that they are better prepared to work in the tax preparation industry. The AFSP is voluntary, but there are certain benefits to participating, as well as restrictions if you do not participate.
In 2012, the IRS created the Registered Tax Return Preparer Program (RTRP) in an effort to accomplish similar goals of requiring education for all tax preparers. The RTRP program was discontinued in January 2013. If you took and passed the RTRP exam before it was discontinued, you are recognized for your advanced tax knowledge and receive the benefit of being considered exempt from the Annual Tax Refresher Cours (AFTR). View the types of tax preparers who are "exempt" here.
The IRS is trying to get legislation passed to allow competency testing and required CE for all tax preparers, and the AFSP program is seen as an interim measure to encourage tax education for all tax preparers.
CE Credit Hours Required for calendar years 2016 and beyond
Non-Exempt (need 18 hours) - FunCPE Tax Package #6
- 6 CE hours - Annual Federal Tax Refresher (AFTR) Course
- 2 CE hours - Ethics
- 10 CE hours - Federal tax law (any other Federal tax course besides AFTR course and Ethics course)
Exempt (need 15 hours) - FunCPE Tax Package #5
- 3 CE hours - Tax law update
- 2 CE hours - Ethics
- 10 CE hours - Federal tax law updates (any other Federal tax course besides update course and Ethics course)
Are you exempt or non-exempt?
Find out which category you are in here. The only difference in CE requirements is the non-exempt tax preparers have to take the 6 hour AFTR course, while the exempt tax preparers take the 3 hour tax update course. The AFTR course is a timed 3 hour exam with 100 randomly selected questions, in accordance with IRS regulations.
CE Requirements the first year in 2014
Since the AFSP program was created in mid-year, the CE requirements for 2014 were pro-rated to lower amounts. View the requirements for 2014 here.
When should I take my CPE courses for the AFSP Record of Completion credential?
The IRS requirement for CPE sponsors is to only offer the AFTR course in the second half of the year. As a result, our AFTR course is available on our site from June 1st to December 31st.
All other CPE courses besides the AFTR course can be taken at any time during the year, but must be completed by December 31st.
The following are actual questions we have received from our students. Don't see your question asked and answered? Please call or email us--we know the Annual Filing Season Program requirements are confusing!
About the FunCPE AFSP courses
- What score do I need to pass the course?
- What does interactive mean?
- Is there a calendar due date for course completion for AFSP courses?
About the course materials
- Can I print out the exam, complete it on paper, then go online to plug in my answers and submit?
- Do I need to go somewhere else to get the materials, or do I print them from your site?
You must achieve a 70% correct or better on each course in order to pass. All courses allow unlimited free retakes. In accordance with the IRS requirements, you cannot see which answers you missed, if you fail the exam. Once you pass the exam, you can view what you missed, and what the correct answer is.
The term interactive is defined by the IRS, the AICPA and other professional organizations to describe the format of self-study courses.
Definition of an interactive course: Interactive continuing professional education (CPE) courses are self-study courses that include three elements:
1) Course study guide.
2) Review exam with
- feedback to incorrect responses,
- reinforcement feedback to correct responses and
- at least 5 questions per CPE credit hour issued.
3) Final exam with
- a minimum passing grade of at least 70% and
- at least 5 questions per CPE credit hour issued.
Yes, all courses must by completed by December 31st in order to receive the IRS Record of Completion for the tax season starting the following January. Our standard time limit is one year from date of purchase, so this is the date that shows up as your course expiration date. This is the FunCPE expiration date, but the IRS requires you to complete the courses by December 31st, regardless of when the course is purchased.
About the course materials
Yes for all courses except the Annual Federal Tax Refresher course, you can print out the exam, mark your answers on the paper copy and then come back to the online course system login and enter your answers. This is the procedure that most students follow.
The Annual Federal Tax Refresher course has to follow certain IRS rules, and those rules are that each time you take the test you get a different set of questions which is randomly generated. So you cannot print out that exam. For this exam only once you start the exam it is timed and you must complete the exam within three hours. You can retake the exam if you don't pass, but the next exam will have different questions on it.
None of the other exams are timed, and if you fail and retake an exam it will be the same exam you took the first time.
All materials for the AFSP package courses are available online. Once you login to the course system you will have a link to print out the materials which are in PDF format. You can also read the materials online or save the file to your hard drive.
All courses are 100% open book.
Instructions for obtaining the AFSP Record of Completion
For year ending 12/31/16--For 2017 tax filing season
The IRS established the new Annual Filing Season Program (AFSP) in July 2014, for the 2015 filing season. The first year (2014) the CPE hours required were lower, but for 2015 and 2016 they have remained the same.
There are 4 steps to obtaining the Record of Completion (ROC).
Step 1: Renew your PTIN for 2016. You need to have a valid PTIN at the time you complete a CPE course in order for the credits to get posted to your PTIN account. Then you will need to renew your PTIN for 2017 in order to prepare returns during calendar year 2017.
Step 2: Complete the required CPE courses by 12/31/16. The courses you need depend on whether you are exempt or non-exempt. See related article "Am I exempt or non-exempt?" We post your completed CPE hours to the IRS electronically.
Step 3: Receive email notice from IRS (TaxPro_PTIN (at) irs.gov) that you have met all the requirements of the AFSP. This usually takes about a week from the time you complete all your hours.
Step 4: Login to your PTIN account at www.irs.gov/ptin to agree to the terms.
On the Main Menu, select "AFSP Record of Completion - Circular 230 Consent" (or if you have a credential such as EA or CPA etc), the option will read "Elect to Participate in AFSP."
Follow the screen prompts to elect to participate.
In 24 hours, you should log in again to find a printable Record of Completion in your "View my messages" mailbox.
After you receive your Record of Completion
You will be listed on the IRS website in the "Directory of Federal Tax Return Preparers with Credentials and Select Qualifications."
Your rights as an AFSP
AFSP participants will have limited representation rights, meaning they can represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service.
PTIN holders without an AFSP – Record of Completion or other professional credential are only permitted to prepare tax returns. They are not be allowed to represent clients before the IRS after January 1, 2016. Read the full explanation about tax preparer representation rights here.
What to put on your business card
Tax preparers can add the term "AFSP - Record of Completion" to business cards, stationary, email signatures, etc.
What if you do not get the email notice from the IRS
The first thing to check if you do not get the notice that you have met the requirements for the AFSP, is to login to your PTIN account at the IRS website, and verify all the CE hours you have completed have been posted to your account. If the hours have not been posted, contact your CE Provider (FunCPE, for example) by email to find out if possibly there was a problem posting your hours.
The IRS indicated to us that the AFSP emails are sent once a week on Thursday nights. You would be expected to receive the email on the Thursday following your completion of all required courses. If you complete your courses on a Thursday, you would receive the email the following Thursday, due to the 24 hour time lag of the IRS posting your hours to your PTIN account.
What does it mean to be "exempt"
The term "exempt" related to the IRS Annual Filing Season Program (AFSP) does not mean exempt from the the program itself. It just means you are exempt from one part of the program: the Annual Federal Tax Refresher (AFTR) course, which is a 6-hour course with a timed final exam.
The category of preparers called "credentialed preparers" are not expected to participate in the AFSP at all, and could be considered "exempt" from the entire program.
Who are credentialed preparers?
A credentialed preparer is a:
- Certified Public Accountant,
- Enrolled Agent,
- Enrolled Retirement Plan Agent,
- Enrolled Actuary or
The AFSP program is not intended for credentialed preparers who already possess a much higher level of qualification. These preparers are still allowed to participate in the program, and they are required to meet the same CE requirements as preparers in the exempt category.
Although there is no cost associated with obtaining a record of completion for the AFSP, and many credentialed preparers would already have the necessary CE to meet the standards, there is very little benefit to obtaining the record of completion. The database that the IRS is setting up of tax preparers with qualifications will already include practitioners with recognized credentials and higher levels of qualification and practice rights, if they are registered with the IRS.
Who is exempt from the AFTR course?
The IRS recognizes it that some individuals have already studied for and passed state based tax preparer certification tests. Additionally some preparers have obtained credentials that indicate they have a solid basic knowledge of federal tax law.
The following tax preparers are not required to take the basic level course called the Annual Federal Tax Refresher (AFTR) to meet the voluntary CE standards.
1 Registered Tax Return Preparers
Anyone who passed the RTRP test administered by the IRS from November 2011 to January 2013.
2 State registered return preparers
Return preparers who are active registrants of:
- Oregon Board of Tax Practitioners
- Licensed Tax Consultant (LTC)
- Licensed Tax Preparer (LTP)
- California Tax Education Council (CTEC) or
- Maryland State Board of Individual Tax Preparers (MITP)
3 Certain credentialed professionals
Individuals who have obtained credentials from the Accreditation Council for Accountancy and Taxation:
- Accredited Business Accountant/Advisor (ABA)
- Accredited Tax Preparer (ATP)
4 Passed Part 1 of the Special Enrollment Exam for Enrolled Agents
Tax practitioners who have passed the SEE Part 1 within the past two years.
5 VITA volunteers
Quality reviewers and instructors with active PTINs.
What is the benefit of being classified as exempt?
If you are classified as exempt according to the classifications listed above, you are exempt from taking the Annual Federal Tax Refresher (AFTR) course. The AFTR course is a six hour course and in addition to completing the materials, you must pass a 100 question exam within a three hour time limit. You are allowed to retake the exam an unlimited number of times, however each exam must contain a mix of different questions.
In addition to saving six+ hours of your time, your spared the expense of purchasing an extra course.
Which courses should I take?
After you determine if you are exempt or non-exempt, you can choose your CPE courses for your AFSP. (Note: feel free to call or email us if you are not sure about your status of being exempt or non-exempt).If you want to take a package, choose between: If you want to pick and choose your own courses, review the hours needed here:
Note: the CE requirements are the same for 2016 as for 2015
Note that the CE requirements were lower when the AFSP program started in 2014 because the program started in the middle of the year and the requirements were prorated. From 2015 onward, the CE requirements are expected to be the same every year
Remember, you must complete all courses by December 31st.