Why Participate in the AFSP?
Everything You Need to Know
The U.S. Tax Code is known for its complexity, making it challenging for many taxpayers to confidently prepare their federal income tax returns, even with the help of tax software.
However, seeking assistance from professionals such as Certified Public Accountants (CPAs), Enrolled Agents (EAs), or tax attorneys to handle tax preparation can be costly, and their schedules often fill up quickly during the tax season.
This is where you, the tax return preparer, come in.
As a tax return preparer, you can help individuals with their income tax returns without needing extensive schooling and testing to become a tax attorney or CPA.
By completing regular continuing education (CE) courses that cover significant changes in tax law or procedure, you can qualify to be on the IRS's online directory of tax return preparers.
However, before you can begin working as a federal tax return preparer, you must successfully complete the Annual Filing Season Program (AFSP).
Continue reading to understand better the AFSP—how it operates, who can benefit from it, and how it can be an advantage to you.
What is the Annual Filing Season Program?
The Annual Filing Season Program (AFSP) aims to acknowledge the dedication of non-credentialed tax return preparers who strive for a higher level of professionalism.
Completing the AFSP gives the IRS confidence that these individuals can assist others in preparing their income tax returns, even without possessing an advanced tax degree or certification.
The AFSP serves a dual purpose: it enables the IRS to regulate tax preparers who may not fit into the categories of CPAs, EAs, or tax attorneys, while also granting non-credentialed tax preparers access to the same continuing education courses available to other tax professionals. This, in turn, can reduce the cost of tax services for individual taxpayers and businesses.
By promoting the accuracy of submitted income tax returns, the IRS can minimize its own staffing requirements and streamline the process of audits and tax appeals.
Tax preparers who complete the AFSP can be listed on the IRS's public database of tax professionals. This listing includes up-to-date contact information, making it a valuable resource for taxpayers seeking local assistance. Additionally, being included in the database can significantly benefit the businesses of those whose names are listed.
How AFSP Works
To participate in the AFSP, some specific steps and requirements need to be fulfilled. These include completing 18 hours of mandatory Continuing Education (CE), which consists of a six-hour refresher course on federal tax law with a concluding test. It's important to note that only courses labeled "IRS Continuing Education" will count towards the AFSP.
Additionally, obtaining or renewing a Preparer Tax Identification Number (PTIN) each year is necessary. Failure to maintain an up-to-date PTIN will render you ineligible for inclusion in the IRS's AFSP database. Using an expired PTIN on tax returns can also violate IRS regulations that dictate who can prepare and submit tax returns on behalf of others.
You can still prepare clients' tax returns if you possess an active PTIN but still need to complete the AFSP. However, unlike AFSP participants, you are not authorized to represent them before the IRS.
You must agree to comply with the AFSP IRS Professional Conduct Standards, outlined in Circular 230, Subpart B and Section 10.51. These standards include obligations such as promptly providing requested records or information to the IRS (unless they are legally privileged), informing clients about the consequences of uncorrected errors or omissions in their tax returns, and exercising due diligence in ensuring the accuracy of clients' tax documents.
Practitioners who neglect to investigate clients' reported income or deductions, especially when there are suspicious elements, can be held accountable for providing false information to the IRS.
Upon fulfilling all these requirements, the IRS will issue you an AFSP Record of Completion.
Who Is The Program For?
Anyone who doesn't already have a professional tax preparer's credential—like enrolled agents, CPAs, or attorneys—but who would like to help others complete and file their income tax returns or defend themselves before the IRS.
You don't need a specific degree or certificate to participate in the AFSP. Instead, you'll need to fulfill the three main requirements:
- Completion of 18 hours of required CE, including the six-hour Annual Federal Tax Refresher (unless you're exempt), 10 hours of other federal tax law topics, and two hours of ethics
- Obtain or renew your PTIN
- Agree to abide by the ethical regulations outlined in Circular 230
Who is Exempt From the Program?
Anyone who passed the original Registered Tax Return Preparer Exam in 2012-2013 (or one of a few other specific state and national tax tests) will not need to complete the six-hour Annual Federal Tax Law refresher course or its associated test.
However, all AFSP participants will still need to obtain their required 15 hours of CE each year to receive a Certificate of Completion.
These 15 hours include 10 hours of federal tax law, three hours of federal tax law updates, and two hours of ethics.
Those exempt from the six-hour refresher course must also agree to the Professional Conduct Standards required of other ASFP participants and have an active PTIN on file.
Annual Filing Season Program Costs
The IRS doesn't charge AFSP participants for their participation in the program. There's also no fee to obtain a PTIN. This means that the only costs associated with AFSP completion are the cost of the required CE courses.
My Tax Courses Online offers a broad range of affordable IRS-approved AFSP courses, with seasonal sales and specials that can reduce the price even further.
Why Participate?
The AFSP offers three primary benefits to those who complete its requirements:
- Ability to represent clients before the IRS
- Inclusion in the Federal Tax Return Preparers Directory
- AFSP Record of Completion
