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Wednesday, October 24, 2012

The IRS provides excellent support for new and existing tax professionals. This article has been modified to include the new IRS qualifications to become a tax preparer.

The IRS Tax Forums offer three full days of seminars with the latest word from the IRS leadership and experts in the fields of tax law, compliance and ethics. Attendees can earn up to 18 continuing professional education (CPE) credits, learn about the latest IRS e-Services products and schedule a visit to the Practitioner Case Resolution Room. The forums also feature a two-day expo with representatives from the IRS, business, finance and tax software companies offering their products, services and expertise.

Off the record, this is where Tax Professionals from throughout the US meet up and socialize Las Vegas style. In 2007, the Las Vegas Forum was the largest with more than 5,300 total attendees, followed by Orlando with 3,135 attendees and Atlanta with 2,615 total attendance.

Individuals wanting to learn more about the Tax Industry in America may want to consider signing up for the 2008 Forum. Atlanta, Chicago, Orlando, Las Vegas, New York and San Diego are the locations for the 2008 Tax Forums.

More support for new and existing tax professionals can be found at the irs.gov web site, you will see the link for Tax Professionals at the top of the page. Click on this to learn more about the support the IRS provides to Tax Professionals. You can sign up for newsletters, data, new laws, alerts and much more.

Education and Experience

Enrolling in a reputable tax school would be your second step in securing a career in Taxes. Your first step would be to find out the requirements to do state and federal taxes in you state. Once all the requirements are satisfied, you are ready to start work as a tax professional.

You will need to acquire a PTIN number from the IRS (Preparer Tax Identification Number) Even if you have one, you still must pay $65.25 and registered at the IRS web site. (irs.gov -- click on Tax Professionals)

Once you receive your PTIN, new or renewed, the IRS will start to test tax preparers in mid 2011. There is a lot of questions in the industry about the testing. The EA (Enrolled Agent) exam is a bear, and many are expecting the same for the Tax Preparer Competency Test. (Not to worry, there are already schools advertising that they can guarantee that you pass the exam)

Sure you will be a little nervous, most of us were when we first started out. To gain more confidence, new tax professionals can start off working for one of the large franchise tax services. After doing this for one or two years, you will feel confident enough to start out on your own.

We encourage new comers NOT to steal clients from the franchise tax services. The tax payer will tell you all kinds of stories about why he/she should stay with you. Don't buy into it. It is a bad practice to take from the hand that helped you get started. Instead, tell the taxpayer that if he/she is still looking for a permanent tax professional next year; to look you up in the phone book or call 411. If the tax payer tracks you down, then there is nothing you can do but accept them as a new client.

There are pros and cons about attending tax schools on site with one of the large tax franchise services.

The good news is that the cost can be much lower then a regular tax school and they will be more willing to provide employment.

The drawback is, tax school that starts in October and drills you through late December can be hard on your personal life and does not allow you to learn at your own pace. If you have a full time job, a spouse and children -- it can be overwhelming and dropouts are common.

Taxes is Law. Don't let anyone tell you differently. Its easy once you get the hang of it -- however, the on site classes don't help you with this realization until after they have overwhelmed you with new information, tax laws, homework and quizzes.

The truth is, the tax software does all the work for you; what makes you a professional is when you understand what the tax software is doing and can change "things" (legally) to the tax payers advantage.

Now that the IRS is testing all tax payers who can legal do a tax return for pay, the competency will increase greatly, and this leaves room for the cost of tax returns to increase as well. (It appears that there may still be positions available in the tax industry without having to qualify under the IRS's new guidelines, if you work for a company or office who does qualify)

If you do not train to become a professional then you are at the same level as Joe Blow who purchases the major tax software at the office supply store and believes himself to be knowledgeable enough to complete his taxes, even when the taxes become more complex with his financial growth.

Career Paths

For persons who have more then a seasonal desire to work in taxes, you can opt to become a Tax Accountant and work with individuals and small businesses. Tax Accountants not only prepare taxes, they help you with tax planning based upon a client's monthly income, expenses and goals.

Example: Tax Accounts provide simple, yet effective (tax) accounting that 1) provides a solid, IRS audit proof tax return. 2) provides insight on how to increase income and lower taxes. This includes tasks such as quarterly estimated tax payments for Federal and State, employee tax forms, sales taxes, updating information that will provide a clean tax return and maybe even provide a computerized balance sheet. Tax Accountants earn between $35.00 to $85.00 per hour (seasonal work, California)

For persons not interested in Accounting, you can study for the Enrolled Agent exam and become one of IRS's finest. An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.

The license to become an EA can be earned in one of two ways, by passing a comprehensive examination which covers all aspects of the tax code, or having worked at the IRS for five years in a position which regularly interpreted and applied the tax code and its regulations. All candidates are subjected to a rigorous background check conducted by the IRS. (There are no educational requirements other then a high school education)

In California, EAs earn anywhere from $90 to $200 per hour, and some times more depending on their business model. (self-employed)

The Tax Industry looses many good Tax Professionals because the work is seasonal. New Tax Professionals can pre-plan career moves to include a year round income. It may take several tax seasons before 'Taxes' can support you year round.

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