The Annual Filing Season Program (AFSP)
There are four steps to becoming a
credentialed tax preparer in California:
(1) Successfully complete a 60-hour beginner course (we are not offering this course right now);
(2) Get a tax preparer bond;
(3) Get a PTIN from the IRS; then
(4) Register with the California Tax Education Council (CTEC).
Each year thereafter, a CTEC-registered tax professional (CRTP) is required to take 20 hours of continuing education, keep their bond up-to-date, renew their PTIN, and renew their CTEC registration.
Outside of California, just about anyone with a PTIN can prepare a federal tax return. There are no education requirements for tax preparers in most states.
Paid preparers fill out more than half of the individual tax returns that are filed each year. That means the accuracy of about 80 million tax returns depends on the education, skill, and ethical integrity of tax preparers.
With the aim of improving the accuracy of the majority of tax returns filed in the United States, the IRS introduced the "Annual Filing Season Program" (AFSP) in 2014. The AFSP is a voluntary program designed to reward paid preparers with special benefits if they choose to upgrade their skills and expand their knowledge of federal tax matters.
Those who choose to participate in the program can meet the requirements by obtaining specified hours of continuing education and meeting other prerequisites before the upcoming filing season.
To qualify for AFSP benefits, non-credentialed tax preparers (those working in states that do not regulate tax preparers) must obtain 18 hours of continuing education. In addition to 10 hours of federal tax laws and 2 hours of ethics, non-credentialed tax preparers must complete a 6-hour Annual Federal Tax Refresher (AFTR) course.
CRTPs Are Exempt From AFTR Course
qualify for AFSP benefits without taking the 6-hour AFTR course. The IRS
has specifically exempted CRTPs from
the 6-hour AFTR course. However, CRTPs must still complete 15 hours of
continuing education (10 hours of federal tax laws, 2 hours of ethics,
and 3 hours of update) by December 31 to qualify for AFSP benefits.
The California Tax School does not offer the AFTR course because it is not intended for CTEC-registered tax professionals.
Instead, we offer a 20-hour CTEC+IRS program which includes 10 hours of federal tax laws, 2 hours of ethics, and 3 hours of update.
Although the AFSP is a voluntary program,
the IRS still requires all tax return preparers to have a Preparer Tax
Identification Number (PTIN). AFSP participants are expected to renew
their PTIN between October 15 and December 31. The participant will not
qualify for any AFSP benefit unless they complete continuing education
and renew their PTIN by December 31.
How does the IRS know that an AFSP participant is a CRTP? There is a section on the PTIN application where the IRS will ask for “Professional Credentials.” CRTPs need to check the box next to “State Regulated Tax Preparer.” Then, in the following columns, CRTPs should enter “California,” CTEC account/ID number, which will expire on October 31st of the next year.
Circular 230 Adherence
Once a CRTP has completed their continuing education requirements and renewed their PTIN for the upcoming year, they will receive an email from the IRS. The CRTP will be asked to log in to their PTIN account. On the Main Menu, they should select “AFSP Record of Completion — Circular 230 Consent” then follow the prompts and agree to abide by the duties and restrictions relating to practice before the IRS in Subpart B of Circular 230.
Record Of Completion
About four weeks after consenting to Circular 230 through their online PTIN account, the CRTP will receive an AFSP Record of Completion from the IRS which can be displayed and used to stand out from the competition. This certificate will be available in the PTIN holder’s online IRS account for printing. The Record of Completion will show clients and potential clients that the recipient is a well-educated tax preparer who is dedicated to their chosen profession.
Inclusion in IRS Directory
Preparers who receive the
Record of Completion will also have the benefit of being included in the
IRS directory of tax professionals with select qualifications. This
online database (https://irs.treasury.gov/rpo/rpo.jsf)
provides a way for the public to search for qualified tax professionals
in their area. The directory is a searchable, sortable listing that
taxpayers can use to find a return preparer who is up-to-date on current
tax laws and who has met certain educational requirements. The directory
will include the name, city, state, and zip code of AFSP participants who
have obtained a Record of Completion.
CRTPs who do not receive a Record of Completion and are not listed in the IRS directory after four weeks should call the PTIN Hotline (877-613-7846) for assistance.
PTIN holders without an AFSP
Record of Completion or a professional credential can prepare tax
returns, but they will not be allowed to represent clients before the
AFSP participants, on the other hand, will earn limited representation rights. They can represent their clients before customer service representatives and similar IRS employees. AFSP participants can even represent clients during initial audits “before revenue agents,” but they may not represent their clients before appeals officers, revenue officers, or IRS counsel. To gain these limited representation rights, CRTPs must participate in the Annual Filing Season Program both in the year when the client's return was prepared and the year when the client is represented.