What Every CTEC-Registered California Tax Preparer Needs to Know About the new IRS Annual Filing Season Program (AFSP)

By Andy Frye, Vice President, Pronto Income Tax of California, Inc. & Founder, Pronto Tax School

I received a call in May of 2015, on my cell phone in the middle of the day, from the Return Preparer Office (RPO) of the Internal Revenue Service–needless to say I was not exactly excited to receive this call! 🙂

The reason for the call was: we had some incorrect information on our RenewCTEC.com website regarding the IRS Annual Filing Season Program, known as AFSP for short.

The caller stated that our RenewCTEC.com 20 hour course for tax preparers, which has always been designed as a “kill two birds with one stone” tax continuing education product satisfying both California and IRS education hours, was not fit to today’s standards and we needed to change the wording on our website immediately.

As you might imagine, this phone call prompted me to look a bit deeper into the changes and updates the IRS has made to the AFSP program for 2015 and 2016…and I am here today to share this information with any CTEC-registered tax preparers who might have questions.

The New AFSP IRS Program Is No Longer “Mysterious”

The first take-away for me on the call from the IRS RPO office was that the AFSP requirements are being clarified nicely by the IRS. For instance, I was chastised by the RPO caller for using the description “this mysterious new AFSP IRS Program” on our RenewCTEC.com website. Admittedly, the content on that page was rather old, and did need to be updated–because this program is in fact much less “mysterious” in 2015 than it was in 2014.

There can be no doubt that great strain was placed upon the IRS RPO office by tax preparers worried about their professional status over these past few years of changing requirements and court cases. Many times in 2014 it was impossible to get through to the RPO and even if you did the information being given about the new AFSP program seemed shaky and/or conflicting.  We as education providers were left somewhat in limbo when our CTEC tax preparer customers would call us about who qualified for AFSP, what is AFSP, and related matters.

Well I now feel confident after speaking with the IRS RPO officer by phone and also attending a recent RPO speaking engagement that this era of uncertainty regarding the AFSP program is now over and things have become clear to me.

What Exact Hours Do CTEC Tax Preparers Need to Earn the AFSP Credential?

We go into much more detail about the AFSP requirements in the update portion of our 2015 RenewCTEC.com tax update section contained in our course, but for now, I just want to narrowly focus the conversation on what CTEC tax preparers need–or don’t need–to be concerned about with regard to the Annual Filing Season Program (AFSP).

Here are the big points:

— You do not need to do anything other than take a 20 hour CTEC course.  You are considered “exempt” from taking the full 18 hours of federal continuing education including a timed test required of tax preparers who do not have state registration programs as we do here in California.  So you can thank CTEC for getting you out of taking a testa and letting you only take 15 hours federal CE instead of the 18 other tax pros nationwide have to take.

— Our 20 hour RenewCTEC.com course therefore continues to “kill two birds with one stone” and satisfy both CTEC requirements and the specifications of the IRS new AFSP program.

— In addition to completing your CTEC course and renewing your PTIN, you also have to “consent to Circular 230 rules” by making a designation inside your online PTIN account in order to be listed as AFSP-compliant.  Circular 230 is basically the rule book for tax professionals when dealing with the IRS.  EAs have always been bound by these rules but through this new AFSP designation the IRS is familiarizing more “unenrolled” preparers with the Circular 230 rules.

But the bottom line, if you are wondering, is that the only thing you have to do now as a CTEC tax preparer that you weren’t already doing is to make sure that you make that designation regarding Circular 230 inside your PTIN account with IRS.  If you do not consent to the Circular 230 rules inside your PTIN account, you cannot join AFSP.  But you do NOT need to take any new education hours or take any test if you are registered with CTEC already.

If You Don’t Have the AFSP Credential, What Do You Lose?

One of the main clarifications that the IRS is driving home, and asking education providers such as Pronto Tax School to drive home with our customers, involve the consequences of not meeting the AFSP continuing education requirement, which are as follows:

n        — Preparer will not be listed in public database of AFSP-compliant preparers and potential clients may question credentials and education of their preparer.

Tax preparers who do not volunteer to complete the AFSP will, as of calendar year 2016, no longer be able to represent their clients when speaking with the IRS.  Recall here that so-called “unenrolled tax preparers” (no EA or CPA license), which is the majority of tax preparers nationwide, up until now been able to call the IRS under Power of Attorney status about taxpayer situations if and only if the preparer both prepared and signed the tax return being discussed.

 But now, it seems that the IRS will look up your PTIN, and if it does not say AFSP next to your name then you will not be able to represent your client before the IRS starting January 1, 2106.

Anyways, let’s wrap this up now, and hopefully this article has answered some questions for CTEC tax preparers as to how the AFSP program will or won’t affect CTEC preparers in 2015 and 2016.  If you need more information consider investing in our 2015 tax update course which goes into a lot more detail.  The IRS has also released a helpful chart of continuing eduation requirements based on where you live and what your credentials are.

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Training for Your Needs!

Please click the button below for your primary tax credential.

Not sure which credential applies to your situation?  Click here to reach our support team and we'll help you decide.