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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.

The IRS regulates the voluntary Annual Filing Season Program tax preparers (AFSPs) and specifies what types of courses are acceptable for continuing education credit in the Treasury Department Circular 230.  The Circular 230 subject matter description is:

"Qualifying continuing education . . . designed to enhance professional knowledge in Federal taxation or Federal tax related matters (programs comprised of current subject matter in Federal taxation or Federal tax related matters, including accounting, tax return preparation software, taxation or ethics); and

Be a qualiftying continuing education program consistent with the Internal Revenue Code and effective tax administration."

The IRS considers a course to be "Federal tax related" if at least 75% of the material relates to Federal tax.  In other words, accounting courses with a passing reference to tax matters will NOT qualify.  In fact, very few accounting courses qualify and none of the FunCPE accounting courses qualify.

Management courses such as "How to improve your tax practice" usually will NOT qualify, because they focus on office practices and such.  

The only Federal tax course offered by FunCPE that will not qualify for AFSP is "Preparing the 1040--Review + Update" course.  This course is based on the same outline of the Annual Federal Tax Refresher (AFTR) course, and the IRS specifically prohibits additional courses based on this outline for AFSP tax preparers.  It is clearly marked that it is not valid for AFSP preparers.

Many CPE providers such as FunCPE offer courses to a variety of professionals such as  AFSP Tax preparers,Enrolled Agents, Certified Public Accountants and many others.  As a result, some of the courses offered are only valid for certain professions.

All FunCPE courses indicate which professionals can take our courses for credit.  In the unlikely event you take a course that is not valid for your professional credit, please do contact us for a full refund.  We don't want you to pay for a course that you can't use for your license renewal!

 

Summary of accepted courses
  • All FunCPE Tax courses are accepted for AFSP credit
    • Except "Preparing the 1040--Review + Update" course because it is too similar to the Annual Federal Tax Refresher (AFTR) course
  • All FunCPE Ethics courses are accepted for AFSP credit

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

 

Status Annual Federal
Tax Refresher
(AFTR)
Tax Law
Update

Federal
Tax Law

Ethics


Total


Non-Exempt 6 0 10 2 18
Exempt 0 3 10 2 15

 

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. 

 

Tax preparers who are classified as "Exempt" are exempt from taking the Annual Federal Tax Refresher (AFTR) course as part of obtaining the IRS Annual Filing Season Program (AFSP) credential.  See Am I Exempt or Non-Exempt? for further clarification.  Instead of taking the AFTR course, however, they are required to take a Tax Law Update course.

Who can take tax law update courses for credit

Exempt tax preparers

Although you are exempt from taking the 6 hour AFTR course, Exempt preparers must complete a 3 hour Federal tax law update course, in addition to completing 10 hours of any Federal tax law subject courses and a 2 hour tax ethics course.

Enrolled Agents

Enrolled Agents (EA) can take any amount of tax update courses for credit, and it will apply towards their annual minimum CPE requirements.

Non-exempt tax preparers

Non-exempt preparers should not take tax update courses.  These courses duplicate some of the content in the 6 hour AFTR course.

How the Federal tax law update course is reported

CPE providers are required to obtain a course number from the IRS for any IRS CE course offered. The course number should be printed on your certificate of completion.

IRS course numbers look like this:

FAE6R-U-00122-16-S 

The components to the course number are:

FAE6R CE Provider number (for FunCPE)
U Update
00122 Course number
16 First year course offered
S Self-study

 When you login to your IRS PTIN account to check your reported CE hours, the Tax Update courses are reported separately.

 

Problems with taking more than 3 hours of Tax Update courses

The IRS states in an FAQ that any excess tax law update hours will count towards your general Federal Tax law course hours:

"11. What if a preparer has more federal tax update credits than is required for the federal tax law update category in any one calendar year?
The excess federal tax update credit will count toward their federal tax law requirement for that particular calendar year. The PTIN system will automatically apply the excess credit hours to the federal tax law category, although the excess will still show in the PTIN holder’s Federal Tax Update category in the preparer’s online account."

 But students have reported that after taking 4-5 hour tax update courses from other CPE providers:

  • The IRS was not automatically calculating any excess update hours and adding them to the general Federal tax law hours.  As a result the IRS did not issue the notice of eligibility for the AFSP
  • When contacted, the IRS representative stated the the excess update hours would NOT count towards your general hours, contrary to the FAQ response above.

Our recommendation

Our recommendation is that you not expect any extra hours to count towards your total.  Play it safe and take extra general Federal Tax hours to make sure you meet the 10 hour general tax law hours requirement for exempt preparers. 

You should monitor your PTIN account to make sure hours get reported and your get the AFSP notice.  Normally you should get the AFSP notice within 7-10 days of completing all your required CPE.

Instructions for obtaining the AFSP Record of Completion

For year ending 12/31/17--For 2018 tax filing season

The IRS established the new Annual Filing Season Program (AFSP) in July 2014.

There are 4 steps to obtaining the Record of Completion (ROC).

Step 1:  Renew your PTIN for 2017.  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 2018 in order to prepare returns during calendar year 2018.

Step 2: Complete the required CPE courses by 12/31/17.  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.

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