Starting in 2016 a provision put into Revenue Procedure 2014-42 eliminates the limited representation rights that were granted to unenrolled preparers under Revenue Procedure 1981-38. See below.
Procedure 81-38 allows an unenrolled tax return preparer to represent a taxpayer during an examination if the tax return preparer prepared and signed the taxpayer’s return that is under examination (or prepared the taxpayer’s return that is under examination if there is no signature space on the form).
Revenue Procedure 81-38 is modified and superseded for tax returns and claims for refund prepared and signed (or prepared if there is no signature space on the form) after December 31, 2015. Unenrolled tax return preparers may not rely on Revenue Procedure 81-38 to represent taxpayers during an examination of a tax return or claim for refund prepared or signed after December 31, 2015. However, unenrolled tax return preparers may rely on Revenue Procedure 81-38 to represent taxpayers during an examination of a tax return or claim for refund prepared and signed (or prepared if there is no signature space on the form) on or before December 31, 2015.
What does this mean for unenrolled tax preparers? (Answer from Annual Filing Season Program FAQ page on the IRS website.)
10. Will I still be able to represent clients before the IRS if I don’t participate in the Annual Filing Season Program?
Yes, as a PTIN holder you will continue to have limited representation rights before limited offices of the IRS with respect to clients whose return you prepared and signed for calendar year 2015. However, 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.
Attorneys, CPAs, and enrolled agents will continue to have unlimited representation rights and can represent clients before any office of the IRS.
Are there any exceptions to the Annual Filing Season Program testing requirement? (Answer from Annual Filing Season Program FAQ page on the IRS website.)
6. Who is exempt from taking the AFTR course?
Some unenrolled preparers are exempt from the AFTR course requirement because of their completion of other recognized state or national competency tests. These exempt groups are still required to meet other program requirements, including 15 CE credits (10 Federal Tax Law, 3 Federal Tax Law Updates, and 2 Ethics).
- Return preparers who can obtain the AFTR – Record of Completion without taking the AFTR course are:
- Anyone who passed the Registered Tax Return Preparer test administered by the IRS between November 2011 and January 2013
- Established state-based return preparer program participants currently with testing requirements: Return preparers who are active members of the Oregon Board of Tax Practitioners and/or the California Tax Education Council
- SEE Part I Test-Passers: Tax practitioners who have passed the Special Enrollment Exam Part I within the past two years as of the first day of the upcoming filing season
- VITA volunteers: Quality reviewers and instructors with active PTINs
- Other accredited tax-focused credential-holders: The Accreditation Council for Accountancy and Taxation’s Accredited Business Accountant/Advisor (ABA) and Accredited Tax Preparer (ATP) programs
