Welcome to your ultimate guide to understanding the IRS Annual Filing Season Program. The IRS loves acronyms, and so do we. Therefore, we’ll happily use AFSP interchangeably with the Annual Filing Season Program from now on to make life just a little bit easier. (And we’ll learn some new acronyms along the way.)
And what could be easier than having everything you need to know about AFSP all in one place? It’s right here at your fingertips! You’ll discover:
With so many gems to uncover, let’s dig right in!
The first question that you may have is the easiest one to answer.
AFSP is an acronym. It stands for the IRS Annual Filing Season Program. Although this is a voluntary program, you do not want to dismiss it as unnecessary. Consequently, the goal of the program is to encourage continuing education as a tax preparer.
With the AFSP, the IRS allows you to demonstrate your skills in completing a basic 1040 tax return. Also, you will be able to show how much you understand other elements of IRS tax laws. Yes, there is a test at the end. But don’t worry—with the course outline and instruction provided, you will be well-equipped to pass that hurdle.
The Annual Filing Season Program requirements are attainable for non-credentialed tax return preparers who are willing to put forth the effort and time. To clarify, you’ll need to meet the requirement of obtaining 18 hours of continuing education. This CE consists of a six-hour refresher course and test on federal tax law.
Also, each year, the IRS requires you to renew your Preparer Tax Identification Number or PTIN. (Love those acronyms.) Moreover, you must demonstrate your agreement to the regulations outlined in Subpart B, section 10.51 of Treasury Department Circular No. 230.
Continuing education courses often have fees. Similarly, an IRS-approved continuing education provider has the right to determine an AFSP course fee for participants. However, the IRS does not charge you a fee for participating in the AFSP.
What do your fees cover for the required 18 hours of continuing education from an IRS-approved CE provider?
The list from the IRS is not a complete list of all CE providers. Some providers choose not to be included. However, the list is quite extensive and provides you with over 500 names, locations, contact information, and programs offered.
Most importantly, I’ll cover the top 3 AFSP course providers below.
You may wish to contact the providers and ask about the Annual Filing Season Program courses’ dates and fees. The providers will be happy to answer your questions, including:
Many of the providers on the IRS-Approved CE list provide a website for you to contact them directly. If no website is provided, this may indicate that the particular provider does not offer course programs to the general public.
Of note, the IRS limits providers to only offering the Annual Federal Tax Refresher (AFTR) to tax preparers between June 1 and December 31. The AFTR is an essential part of the Annual Filing Season Program requirements.
The IRS-approved CE provider and course administrator will provide the course materials. Providers are responsible for ensuring the required IRS course content is included in the Annual Federal Tax Refresher course (AFTR).
The AFTR test includes 100 questions, all of which are multiple-choice with four potential answers. And like other multiple-choice tests you may have taken, only one answer will be correct. Finally, you will have 3 hours to complete the test.
In addition, you’ll find that the providers we mention below offer the test in an open-book environment. So, if you’re wary of taking tests, having access to your materials and notes should put you at ease.
What can the Annual Filing Season Program Record of Completion mean for your bottom line? When you increase your tax knowledge and expertise, you can expand your practice. For example, you can offer more services and attract new and next-level clients.
Opening yourself up to new career opportunities translates into increased earning potential. Most importantly, your AFSP completion will help you push your salary higher.
There are many benefits to participating in the Annual Filing Season Program. If you complete the AFSP requirements, the IRS will award you with a Record of Completion. You can proudly display this achievement, thereby differentiating yourself among your competitors.
In addition, tax preparers who complete the AFSP enjoy the added benefit of being included in an IRS public database. This database has a long name—Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. It is used by taxpayers to search for vetted and qualified tax return preparers—like you!
The IRS AFSP Record of Completion may be what you need to take your tax preparer business to the next level. Savvy taxpayers are searching for tax preparers with the right qualifications. Your voluntary participation in tax AFSP courses will put your name in front of those prospective clients.
The IRS AFSP Record of Completion puts you in good company. How so? The IRS’s inclusion of your name, city, state, zip code, and credentials in the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications is essential. As an AFSP Record of Completion Holder, the IRS will list your information among CPAs, enrolled agents, tax attorneys, etc. This IRS directory will add validity to your career as a tax preparer.
The IRS itself will not administer the Annual Federal Tax Refresher course (AFTR) or test. They have provided a course outline and test which IRS-approved providers must follow.
The providers are responsible for developing the comprehensive test following the AFTR course. The AFTR course covers tax law topics including
The AFTR test includes 100 multiple-choice questions with four potential answers. However, you must select the best answer. But the providers generously allow a maximum of 3 hours to complete the exam.
If you fail the test, the provider will not provide the IRS with your course completion credits. Therefore, you must pass the AFTR exam to complete the course successfully.
You must complete your AFSP courses by midnight on December 31st for the IRS to acknowledge your AFSP status for the following year.
And don’t forget: The IRS requires you to complete the AFSP yearly. Renewing your AFSP status allows you to continue your professional recognition and limited representation rights.
|Price||# of CE Hours Provided||Vast CE Choices||Open-Book AFTR Test|
|Fast Forward AFSP||$89.10||18||Yes||Yes|
Please note that all the AFSP courses I discuss below include:
And all providers AFTR tests are open book too!
Gleim is an IRS-approved continuing education provider and is an excellent choice for enrolling in the AFSP. Gleim offers two types of AFSP courses—non-exempt and exempt. The non-exempt path is an 18-hour course, whereas the exempt option is 15 hours.
But, how do you know which package to choose? The IRS exempts tax preparers from having to complete the AFSP if they:
So, if one of the above applies to you, select the exempt option.
Once you complete the Gleim AFSP successfully, Gleim will report your CE credits directly to the IRS. That said, you must make sure to provide Gleim with your correct PTIN before the course completion. Gleim will electronically report credit from completed courses every Tuesday to the IRS.
While Gleim has a large CPE and CE catalog, it chooses the CE for AFSP candidates. So, unfortunately, if the topics outside ethics don’t appeal to you, there isn’t a way to choose others (remember, ethics is required). Here are the courses you’ll find in your Gleim AFSP Non-Exempt Course:
Lambers offers an AFSP Tax Preparer Bundle, which includes online self-study video courses. Like Gleim, Lambers is an IRS-approved provider.
Lambers will follow your learning with the final exam required to complete the AFSP. And if you hate to wait for your test results, no worries! Lambers will provide your score in real-time. Similarly, like all the other AFSP courses, you must have a minimum score of 70% to earn the CE credit.
Lambers will provide your CE credits to the IRS for you.
However, unlike Gleim, Lambers will allow you to select the courses that make up your 10 hours of required federal tax law topics. So, you can choose CE that is more suited to your interests.
Fast Forward Academy endeavors to make continuing education more enjoyable. And they are also an IRS-approved provider. Their experts are ready to help you complete the Annual Filing Season Program courses online.
With over 35 available courses to choose from, Fast Forward Academy offers the most flexibility of the 3 options I’ve discussed here.
Also, Fast Forward is the only one to provide the option of purchasing a printed book (all other courses discussed provide e-Books only).
Fast Forward Academy also has 1 more option for AFSP candidates than the other 2, which is the AFTR-only offering. If you’ve already completed 2 hours of ethics and 10 hours of federal tax law CE credits, you can select the AFTR-only option.
However, the price difference between the Exempt and AFTR-only bundle isn’t substantial enough to find CE elsewhere for less. That is to say, you’ll likely pay far more for those 12 credit hours than you would have by purchasing the Exempt Bundle in the first place.
There are two things to keep in mind to meet the IRS requirements:
First, you must have a Preparer Tax Identification Number (PTIN).
The IRS requires a person who prepares or even assists in preparing federal tax returns for money or compensation to have a PTIN. Additionally, enrolled agents and CPAs are also required to have a PTIN.
Luckily, you can obtain a PTIN online, and there is no fee to do so. Also, you can renew your PTIN online. Renewing it online can save you 4-6 weeks of wait time vs. the paper option. PTINs expire on December 31 each year. So, yes, you do have to renew it annually.
Second, you must complete the entire AFSP course for the IRS to award you the continuing education credits. This includes:
An enrolled agent is a designation that means you are enrolled to be licensed to practice by the IRS. In conjunction with that, the IRS authorizes you to appear in place of the taxpayer before the IRS. Thus, you are acting as a licensed agent on behalf of a taxpayer.
Also, EAs may represent the taxpayer with collections, audits, or appeals. EA credentials are accepted and duly recognized by all 50 states in the U.S.
Just as a non-credentialed tax preparer would need to complete the IRS AFSP requirements, an EA must pass the enrolled agent exam. Once completed, the U.S. Department of Treasury grants the EA unlimited representation rights. The EA then enjoys the same representation rights as CPAs and attorneys. Pretty impressive!
Unlike the CPA, an enrolled agent earns a designation, not a license.
However, a CPA is granted a license by one of 55 jurisdictions. Whereas, an EA is granted the designation by the federal government.
Since EAs are recognized at the federal level, the general public regards them as highly-skilled tax preparers. If you have the gift of understanding tax law and all its intricacies, then obtaining EA designation may be right for you.
When considering whether to go for the AFSP or EA designation, consider the following:
If you pursue the AFSP instead of the EA, you may be limited to jobs that pay only slightly above the minimum wage. On the other hand, the EA opens the door to higher-paying jobs and connecting with excellent clients. However, it’s a personal decision, so take your time to weigh the pros and cons of AFSP vs. EA designation.
Most people are familiar with the term CPA. A Certified Public Accountant’s expertise is in high demand.
A CPA can be a tax expert. Additionally, they can prepare financial statements, as well as provide auditing and assurance services. CPAs can expect steady work, varied job opportunities, and increased earning potential as time passes. In contrast, a participant in the AFSP or an EA has a singular focus on taxation.
However, the process for earning a CPA license involves much more than the AFSP. What’s more, the CPA is extensive and requires more than that of an enrolled agent.
The AFSP is not a license or even a designation. However, an AFSP Record of Completion is valuable. If a license is what you are looking for, then a CPA is what you want to pursue.
Again, think carefully about your goals, and what level of continuing education you can reasonably achieve. When you have a clear picture of where you want to be in one year, five years, etc.—the choice between AFSP, EA, and CPA will become clearer.
No doubt you are thinking: When can I take the AFSP course and test? Your first step is to find an IRS-approved provider. Once you have chosen a provider, you will be given the course materials and a time frame to complete the work. Consequently, there will be an exam at the of the course. And you must score a minimum of 70% to earn the CE credits.
As a result, the course provider will submit the credit to the IRS on your behalf.
There is a deadline to be eligible for an AFSP Record of Completion. You must complete and pass the AFTR test and obtain credits by December 31. Completing the AFTR exam will allow you to receive your Record of Completion, which is valid for the start of the next year. Keep this in mind as you consider CE providers and the schedule for courses they offer.
Once you have completed the Annual Filing Season Program’s CE course and met the requirements, you will receive an IRS email. Check your email regularly for this notice. Make sure it has not been inadvertently sent to junk or spam folders.
The IRS’s email is crucial because it will give you the instructions you need to log in to your PTIN account and complete the process.
Consequently, it can take up to four weeks or more to receive the Record of Completion after you have completed the AFTR test. And a similar wait time exists for the IRS’s addition of your name to the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications list. Patience will be required. So, timing is yet another reason not to put off planning to take this beneficial tax course.
The AFSP is not a license to practice as a tax preparer. Moreover, it is not a designation or title you can add to your signature. Certainly, it does a great job of opening doors in your professional life!
Keep in mind the objectives of the Annual Filing Season Program:
So, if you are detail-oriented, ready to continue learning, and organized, then you should definitely consider pursuing the AFSP. You can achieve your dream of being your own boss, enjoy steady work, and decent pay. And you don’t even need a college degree. (Enrolled agents also do not need a college degree.)
The work you perform as a tax preparer will always be in demand by large and small corporations, private practices, legal offices, and more. And once you have earned the AFSP Record of Completion, you will be listed in the IRS public database. Most importantly, inclusion in the database can offer you connections to potential new clients. If you are not ready or do not have the circumstances to pursue the CPA license or EA designation, consider the AFSP as a smart alternative.
You’ve put in the work and completed the Annual Filing Season Program requirements. Now you want to make sure you get the credit you deserve.
You earned it! Here’s how:
Yet another perk of becoming an AFSP accounting professional is limited representation rights. What are these rights? Simply put, you can represent your tax return clients before the IRS. Consequently, you can do so once you have completed their tax return and signed it.
To clarify, you can represent them before IRS agents, customer service reps, or the Taxpayer Advocate Service. In contrast, CPAs and EAs have unlimited representation rights. It’s a great responsibility and privilege to represent your clients in this manner. And it certainly adds to your level of professionalism as a tax preparer.
In contrast, tax return preparers who do not participate in the AFSP or are not a(n) CPA, EA, or tax attorney, have no representation rights. Instead, they can only preparer tax returns.
It’s true—the IRS allows anyone with a PTIN to prepare tax returns for compensation. But some limits can hold you back in your professional life. PTIN holders without an Annual Filing Season Program Record of Completion won’t get as far.
You need to complete CE courses and put in the time and effort to advance in your career. But, doing so leads to the Annual Filing Season Program Record of Completion, which offers you more marketability than tax preparers who do not participate in the program (or are not otherwise designated or certified).
Additionally, the IRS will include your information in the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.
Most importantly, your knowledge of tax law updates and changes will prove to be invaluable. Not just for you and your business, but your clients as well.
So, is the Annual Filing Season Program right for you? Let us know what you’ve decided in the comments!
I am the author of How to Pass The CPA Exam (published by Wiley), and I also passed all 4 sections of the CPA Exam on my first try. Additionally, I have led webinars, such as for the Institute of Management Accountants, authored featured articles on websites like Going Concern and AccountingWeb, and I'm also the CFO for the charity New Sight. Finally, I have created other accounting certification websites to help mentor non-CPA candidates. I have already mentored thousands of CPA, CMA, CIA, EA, and CFA candidates, and I can help you too!