The U.S. Tax Code can be incredibly complicated, which is why many taxpayers are hesitant to prepare their own federal income tax returns, even when using tax software. However, hiring a Certified Public Accountant (CPA), Enrolled Agent (EA), or tax attorney can be expensive, and these professionals’ schedules often fill up early in the year.
This is where you, the tax return preparer, come in.
As a non-credentialed tax preparer, you can still help others prepare and file their income tax returns without undergoing the extensive education and testing required to become a CPA, EA, or tax attorney. By completing specific continuing education (CE) courses that cover significant changes in tax law and procedure, you can also participate in the Annual Filing Season Program (AFSP), which will elevate your professional standing and allow you to be listed on the IRS's public directory of tax return preparers.
However, before you can start preparing returns professionally at this level, you’ll need to complete the AFSP. Here's everything you need to know about how it works, who it benefits, and how it can boost your career.
What Is the Annual Filing Season Program?
The IRS created the AFSP to recognize non-credentialed tax preparers who demonstrate a higher level of professionalism and knowledge. By completing the AFSP, you can show the IRS and your clients that you have updated knowledge of the latest tax laws and can assist others with their income tax returns, even without a higher-level tax degree or credential.
The AFSP also allows the IRS to regulate non-credentialed tax preparers while providing an opportunity for these preparers to access the same CE courses available to other tax professionals. This program benefits taxpayers by offering affordable tax preparation services, and it helps the IRS streamline audits and tax appeals.
One of the key benefits of completing the AFSP is being listed in the IRS’s public directory of tax professionals, which can help you attract new clients. The directory includes your up-to-date contact information, making it easier for taxpayers to find your services, especially in competitive areas.
How Does the AFSP Work?
To participate in the AFSP, non-credentialed tax preparers must complete 18 hours of continuing education (CE), which includes a six-hour Annual Federal Tax Refresher (AFTR) course with a test at the end. Additionally, you’ll need to complete 10 hours of federal tax law updates and two hours of ethics.
Remember to complete up to 18 hours of continuing education from IRS-approved CE providers, like My Tax Courses Online, and that only courses labeled “IRS-approved” count toward AFSP completion. Once you’ve completed the required hours, you’ll receive an AFSP Record of Completion from the IRS.
You must also have an active Preparer Tax Identification Number (PTIN) to participate. Your PTIN identifies you on each tax return you prepare, so using an expired PTIN or failing to renew it annually can lead to IRS penalties.
If you haven’t completed the AFSP but have an active PTIN, you can still prepare tax returns for clients. However, unlike AFSP participants, you won’t be able to represent clients before the IRS for returns you’ve prepared and signed.
Finally, you must agree to comply with the IRS Professional Conduct Standards, outlined in Circular 230, which include the following requirements:
- Turning over requested records or information to the IRS unless they are privileged under law
- Advising clients of the consequences of errors or omissions in their tax returns
- Exercising due diligence in verifying the accuracy of a client’s tax return and documents
Once you complete these steps, the IRS will provide you with your AFSP Record of Completion.
Who Is the AFSP For?
The AFSP is designed for non-credentialed tax preparers who wish to elevate their professional status. If you are not an Enrolled Agent (EA), CPA, or attorney, the AFSP provides a way to demonstrate your tax preparation knowledge and gain limited representation rights before the IRS.
To complete the AFSP, you must fulfill three main requirements:
- Complete 18 hours of IRS-approved CE courses, including the six-hour AFTR course (unless exempt), 10 hours of federal tax law, and two hours of ethics.
- Obtain or renew your PTIN annually.
- Agree to comply with the IRS’s ethical regulations outlined in Circular 230.
Who Is Exempt From the AFSP?
Certain individuals are exempt from completing the six-hour AFTR course. If you passed the Registered Tax Return Preparer Exam in 2012-2013 or a similar state or national competency test, you may be exempt from the refresher course and test. However, you’ll still need to complete 15 hours of CE each year to maintain your Record of Completion, including 10 hours of federal tax law, three hours of federal tax law updates, and two hours of ethics.
Exempt individuals must also comply with IRS Professional Conduct Standards and maintain an active PTIN.
Representation Rights
One of the most significant benefits of completing the AFSP is that it grants limited representation rights before the IRS. This means that you can represent clients in matters related to returns you’ve prepared and signed. However, it’s essential to note that these representation rights are limited to specific tax matters. For full representation rights, clients must work with a CPA, EA, or tax attorney.
Annual Filing Season Program Deadline
To participate in the AFSP for the upcoming tax season, tax preparers must complete their CE requirements and submit credits to the IRS before the program’s expiration deadline of December 31. This ensures your name is listed in the IRS directory for the next filing season.
Costs of the AFSP
In 2024, the fee to renew or obtain a PTIN for 2024 was $19.75, which is set at $11 per application or renewal (plus an $8.75 fee payable to the third-party contractor). Please be aware that the fees may change annually, and the PTIN fee is non-refundable. Failure to have and to use a valid PTIN may result in penalties.
Why Participation in the AFSP Is Beneficial
The AFSP offers several advantages for non-credentialed tax preparers:
- Representation Rights Before the IRS: With a Record of Completion, you can represent clients in matters related to the returns you’ve prepared and signed.
- Inclusion in the IRS Directory: Being listed in the IRS’s public directory can help you grow your client base, especially during tax season.
- Professional Recognition: Having an AFSP Record of Completion helps you stand out from the competition, showcasing your commitment to tax law education and accuracy.
The Annual Filing Season Program provides a straightforward path for non-credentialed tax preparers to gain credibility, expand their client base, and improve their knowledge of tax law. If you’re a tax preparer interested in completing the AFSP, My Tax Courses Online offers a variety of affordable, IRS-approved CE courses and packages to help you meet the requirements.
The AFSP completion is annual and requires ongoing education to maintain the Record of Completion. By completing the AFSP, you not only enhance your professional reputation but also give your clients the confidence that their tax preparer has up-to-date knowledge of current tax laws. Don’t miss the December 31 deadline to complete your CE courses and secure your place in the IRS’s directory for the upcoming tax season.
For more information on AFSP courses and packages, visit My Tax Courses Online today!
