Preparing for the IRS Competency Test
There has been quite a bit of discussion within the CTEC and the IRS Tax Preparer community about how to prepare for the IRS competency test. The competency test includes 120 questions and covers the 1040 and ethics. The length of the test is 2.5 hours and costs $116. One of our product specialists took the test last month and thought it was very straightforward and relatively easy to pass. It is a open-book test, with the PUB 17 and the 1040 instructions provided at the testing center. Our recommendation at this point, is to take your annual CPE tax update course first, than schedule an appointment to take the test. If you feel you need additional preparation, the outline of the test sections are provided by the IRS below, although our feedback so far is that, if you are a practicing tax preparer, you will not need additional preparation.
To assist in test preparation, the following is a list of recommended IRS study materials. This list is not all-encompassing, but a highlight of what the test candidates will need to know. IRS encourages preparers to go green and download electronic copies of the reference materials for study purposes. Simply click on the resource you need. Once it is open, select File: Save As to save it to your computer.
- 2011 Form 1040
- 2011 Form 1040 Instructions
- 2011 Publication 17: Your Federal Income Tax
- Circular 230 (Rev. 8-2011): Regulations Governing Practice Before the Internal Revenue Service
- 2011 Publication 334: Tax Guide for Small Business
- 2011 Publication 970: Tax Benefits for Education
- 2011 Form 6251: Alternative Minimum Tax - Individuals
- 2011 Form 6251 Instructions
- 2011 Form 8879: IRS e-File Signature Authorization
- 2011 Publication 596: Earned Income Credit
- 2011 Form 8867: Paid Preparers Earned Income Credit Checklist
- Form 2848 (Rev. March 2012): Power of Attorney and Declaration of Representative
- Form 2848 Instructions (Rev. March 2012)
- Form 8821 (Rev. October 2011): Tax Information Authorization
- Publication 1345 (Rev. 3-2009): Handbook for Authorized IRS e-file Providers
- Publication 4600 (Rev. October 2008): Safeguarding Taxpayer Information Quick Reference Guide For Businesses
You have until 2013 to complete the competency test (you can’t renew your PTIN in 2013 without passing). In order to take the test, you must have a PTIN. You can schedule your test directly from your online PTIN account.
Scheduling your Competency Test:
In order to take the test, you must have a PTIN. You can schedule your test directly from your online PTIN account.
Check out this short video on how we help accountants thrive.
Lee Reams II
I am a marketing junkie who has spent the last 20 years developing and executing "best in class" word-of-mouth marketing campaigns. With over 10,000 happy clients I think we are on to something. The explosion in web marketing and social media have redefined the way independent professionals market their practices. Follow my blog to see if you can take some of our actionable ideas to market your own practice.