What Is a Tax Preparer?
A paid tax preparer is anyone who receives compensation to prepare, or help prepare, a federal tax return or claim for refund. Paid preparers range from independent sole practitioners working from a home office to enrolled agents, CPAs, and attorneys at large firms. What they have in common is that the IRS requires every compensated preparer to hold a Preparer Tax Identification Number (PTIN) before signing any return.
The tax preparation field is large and open to new entrants without a college degree. The IRS does not require preparers who are not enrolled agents or CPAs to complete a formal certification program before filing returns, though several states add their own requirements and optional federal programs (like the Annual Filing Season Program) reward continuing education with additional IRS recognition. Independent preparers typically work seasonally, with the bulk of individual return work running from January through mid-April.
To practice as a paid preparer you need: a valid PTIN (required by the IRS for all compensated preparers), an EFIN if you intend to e-file returns yourself as an Electronic Return Originator, professional tax preparation software that produces IRS-accepted electronic returns, and a plan for continuing education to keep your knowledge and credentials current.
Getting Started: The Four Essential Steps
Get Your PTIN
Your Preparer Tax Identification Number (PTIN) is a unique identifier the IRS issues to all compensated tax preparers. You must have a valid PTIN before you can sign any return you are paid to prepare. PTIN registration is handled entirely through the IRS online system at irs.gov/ptin and typically completes the same day for straightforward applications. There is an annual registration fee. Your PTIN must be renewed each year by December 31.
Apply for Your EFIN
An Electronic Filing Identification Number (EFIN) is issued by the IRS to businesses and individuals approved to electronically submit tax returns to the IRS. If you intend to transmit returns yourself (acting as an Electronic Return Originator, or ERO), you need your own EFIN. If you plan to transmit returns through an existing authorized provider like ATP, you do not need to hold your own EFIN to get started. The EFIN application process through irs.gov/e-services includes a suitability check that typically takes two to six weeks.
Choose Your Tax Preparation Software
Once you have your PTIN and an EFIN (or a transmission arrangement with an authorized provider like ATP), you need professional tax preparation software. Consumer-grade tax software like TurboTax is not designed for professional use. America's Tax Professionals is an authorized reseller of TaxWise(R) by Wolters Kluwer, which includes federal and state preparation, bank products, multi-state processing, and bilingual English and Spanish forms. ATP offers payment plan options so new preparers can spread the cost over the season, and a free demo copy is available by mail.
Continuing Education and Professional Development
The IRS does not mandate continuing education for most non-credentialed preparers, but staying current on tax law changes is a practical and professional requirement. Two formal programs provide structured education and IRS recognition for non-credentialed preparers.
The IRS Annual Filing Season Program (AFSP) awards a Record of Completion to preparers who complete 18 hours of continuing education each year from IRS-approved providers. AFSP participants are listed in the IRS public directory of tax return preparers, which can build credibility with prospective clients. California requires all non-credentialed preparers to hold a California Tax Education Council (CTEC) registration, which requires 20 hours of CE annually from a CTEC-approved provider.
America's Tax Professionals partners with the Golden State Tax Training Institute (GSTTI), an IRS-approved and CTEC-approved continuing education provider in operation since 1983. GSTTI offers AFSP and CTEC courses for tax preparers at all levels. Remember: your PTIN must be renewed by December 31 each year regardless of your CE status.
Frequently Asked Questions
How long does it take to become a tax preparer?
You can begin the process in a few hours. PTIN registration through the IRS online system typically completes the same day if your application is straightforward. EFIN approval takes longer: allow two to six weeks for the IRS suitability check. Once you have your PTIN and an EFIN (or a transmission arrangement with an authorized provider), you can begin preparing returns as a paid preparer.
Do I need a CPA to prepare taxes?
No. A CPA license is not required to prepare and file federal tax returns as a paid preparer. All compensated preparers must have a valid PTIN, but CPA status is not a prerequisite for most federal returns. Some states impose their own preparer registration or competency exam requirements. California, for example, requires CTEC registration for non-credentialed preparers.
What is the difference between a PTIN and an EFIN?
A PTIN (Preparer Tax Identification Number) identifies you as an individual compensated tax preparer and is required on every return you sign. An EFIN (Electronic Filing Identification Number) authorizes a business or individual to electronically transmit returns to the IRS as an Electronic Return Originator. You must have a PTIN before you can prepare returns for pay. You need an EFIN (or a transmission arrangement with an authorized provider) to e-file returns.
What software do tax preparers use?
Professional tax preparers use dedicated tax preparation software rather than consumer products. Common platforms include TaxWise(R) (Wolters Kluwer), Drake Software, ProSeries (Intuit), and UltraTax CS (Thomson Reuters). America's Tax Professionals is an authorized reseller of TaxWise, offering desktop and online packages for independent preparers and small offices with payment plan options and direct setup support.