As of October 2012, out of nearly 400,000 provisional PTIN holders, more than 320,000 still need to pass the new IRS Registered Tax Return Preparer examination. Starting November 1st, that means they have 14 months to finish their testing by December 31, 2013.

Think about it. That means nearly 22,800 people will need to test during each of the next 14 months – or nearly 1,100 per day (facilities are open 5 days/week) – along with all the other candidate in all the other professions, like nurses, CPAs, firefighters, police officers, etc.

Prometric only offers the RTRP exam in the United States, where they have 263 facilities. That means at least 4 or 5 RTRP candidates should be testing at each facility every day.

That’s manageable – if folks do test in each facility – and if they do start testing immediately. However, Prometric only permits one exam candidate per exam to use the facility at the same time. (In other words, 2 RTRP candidates cannot both be taking the test at the Atlanta facility from 2:00 pm to 5:00 pm on the same day.) That does limit the parameters even more.

Of course, since most candidates live in or near large urban centers…there’s likely to be quite a scramble for test appointments.

Worse, as a source at Prometric points out, if candidates wait until September or October of 2013 to start testing, Prometric will have a hard time accommodating 300,000 in only three months. (3 months x 4.25 weeks x 5 days/week = 63.75 testing days. 300,000/63.75 = more than 4700 people per day.) Oh sure, spread across all the facilities in the U.S., that only means about 18 people per day. But we all know the concentration will be in the large cities – and there simply won’t be enough seats. Candidates will have to drive 100 miles or more to a facility, or fly to a smaller town, perhaps in another state or country, to locate a seat.

Prometric recommends that if you do plan to wait until the last few months, you reserve your seat right now. At least you’ll be able to get a spot in a testing facility near you. If you end up having to reschedule more than 30 days before your appointment date, you’ll be able to do so at no charge. Less than that? You’ll have to pay a fee to reschedule. (In the last 5 days? You’ll have to pay the full fee all over again.)

Expensive Deadline to Ignore

What happens if they don’t pass the RTRP exam by December 31, 2013?

According to the IRS, on January 1, 2014, provisional PTIN holders will lose their PTINs and be unable to efile; to get paid to prepare a tax return; or to do any substantive work on a tax return for a tax firm. At least not legally.

Folks working for themselves will lose their livelihoods – or they will be forced to hire an RTRP, EA or CPA with an EFIN and PTIN to do the sole practitioner’s job until he or she can pass the exam and qualify. There goes all the profit.

Firms with staff they count on for much of the day-to-day tax work, won’t be able to let those key staff members touch a tax return.

Take the Test, NOW!

There’s really no need to put off the exam. After all, it’s an open-book exam. A tax professional with years of experience should be able to pass the exam relatively easily.

Well, maybe not so easily. There’s a twist to this exam that you won’t expect – and where there is no open book. A big chunk of the exam is on compliance – Circular 230. So study that and the exam will be easy to pass.

Feeling queasy about exam-taking and need help? There are dozens of courses, tools and materials to help you pass the exam.

In fact, I am teaching regular review classes at CPE Link – or you can pick up the self-study version.

What happens if you don’t pass when you take the exam this year or next? Nothing. Sure, you’re out $116 – but you can sit for the exam again, as many times as it takes to pass. So you have nothing to lose but a few hard-earned dollars. At least you’ll be able to continue to earn lots of dollars if you pass.

And remember, even if you only have a provisional PTIN right now, you’re still responsible for the 15 hours of continuing education. You’ll need proof of those CE credits in order to renew your PTIN this year.

Of course, if you’re planning to take the EA exam instead, skip the RTRP exam and study hard to get your EA well before Registered Tax Return Preparer deadline. If you don’t happen to finish all three parts of the EA exam – then you can join the last-minute scramble for the RTRP exam.

Guest blogger, Eva Rosenberg, Tax Mama

Advertisements