Do You Need a Tax Preparer License?

The new IRS requirements for paid tax preparers are not requirements for a tax preparer license. As of the date of this post there are only two states that require a Tax Preparer License, Oregon and California.  If you prepare taxes in Oregon or California, you will need to meet both the state and federal tax preparer requirements. Both Oregon or California require formal tax training where the new IRS regulations only require PTIN registration and when implemented, the completion of the tax preparer competency exam and continuing education. A tax preparer license in California or Oregon does not exempt a paid tax preparer from the IRS tax preparer registration requirements to obtain a PTIN, pass the IRS competency exam, and complete continuing education requirements.

In general the tax preparer license requirement for the State of Oregon includes 30 clock-hours of acceptable education during the license year.

Prerequisites:

  1. Be at least 18 years old.
  2. Be a high school graduate or have a GED.
  3. Successfully complete Board-approved 80-class-hour tax course on basic tax law.
  4. Pass Board exam on basic tax law and practice.

In California, tax preparer certification carries the title as a California Registered Tax Preparer or CRTP. The requirements include:

  1. Complete 60 hours of qualifying tax education
  2. Completion of 20 hours of continuing tax education each year
  3. Maintenance of a $5,000 tax preparer bond

The IRS has not issued guidance regarding whether meeting state tax preparer continuing education requirements will meet the continuing education requirements (when implemented) of IRS Registered Tax Return Preparers. It is probably safe to assume that the IRS will accept the state required continuing education courses, perhaps with some modification by the tax course vendors. However, it is doubtful that a state issued tax preparer license will exempt a state certified tax preparer from the IRS Competency exams. State licensed tax preparers should plan on taking the IRS Competency exams.

The Tax Preparer Study Guide is now available. You will find information on how to order here.