Monday, January 20, 2014


EA Anthony DiPierro had this to say in a comment on my The Future of the RTRP Designation – The Conversation Continues post -

"’There is no change to the EA credential, except for a better name.’  {quoting a statement I made in the post – rdf}

Is this referring to the name "Enrolled Tax Return Preparer"? If so, this is a worse name. Status as an enrolled agent has nothing to do with tax return preparation. It has to do with the ability to act as an agent - to represent taxpayers in front of the IRS.

As I said on Jason's blog, the only way I'd possibly support this is if the RTRP test (or whatever you want to call it) is just as hard as the SEE (the EA exam), and no one is grandfathered in except possibly those who have passed the SEE.

If you give people who are less expert in taxes than EAs a special designation, that absolutely *will* hurt the EA credential. There's nothing magical about the term "Enrolled Tax Return Preparer" which tells the public that it's a higher status than "Registered Tax Return Preparer". The latter would quite plainly dilute the value of the former. And if the test isn't mandatory, what's the point of making it easier than the SSE?"
My response to Anthony -

The Enrolled Agents I know of are primarily tax preparers.  While there are obviously EAs who restrict their practice to representation, it is my opinion that the “bread and butter” of the average EA is tax return preparation.

I am aware of several Enrolled Agents who, prior to the Loving decision, actually sat for the RTRP exam in order to be granted the RTRP designation.  The reason is the confusion with the EA credential.

As one EA put it (the story is hers, but the words are mine) –

A taxpayer who is looking for someone to prepare his return considers two tax pros. 

He asks the first person if he has any professional credentials and is told that the tax pro is a “Registered Tax Return Preparer”.  The very name identifies that the person is a tax return preparer and has done something to indicate that he/she is competent in preparing tax returns.

He asks the second person and is told that he/she is an “Enrolled Agent”.  “What is that?  An “agent” of the IRS?  What does that have to do with preparing my tax return?”  The EA tries to explain, which only adds to the confusion.

If the EA had said upfront that he/she was a “Registered Tax Return Preparer” (or an “Enrolled Tax Return Preparer”) there would be no further questions and the two tax pros would be starting out on equal footing in the eyes of the potential client.  

You and I both know that the EA is a better credential than the RTRP – but the average taxpayer does not.

If the EA tells the potential client that he/she is an “Enrolled Tax Return Preparer” then the potential client can see that he/she has clearly done something to indicate that he/she is competent in preparing tax returns.  If the taxpayer asks the ETRP what is the difference, he/she can say that he/she is authorized to represent the taxpayer before all levels of the IRS.

I have proposed that the voluntary RTRP candidate pass a much more extensive test than the original RTRP basic competency exam – perhaps the portions of the Special Enrollment Exam that deal with 1040 preparation, and also touching on basic business tax issues.

If the IRS had a two-tiered voluntary credentialing program, which includes the EA, the Service would need to promote the entire program and identify the increased value of the ETRP component.

I take exception to one of Anthony’s statements.  Just because a tax professional does not possess the EA credential does not mean that he/she is “less expert in taxes than EAs.  I am not accusing Anthony of anything, but over the years I have encountered an “arrogance” among some of those with initials - in taxes, accounting, and other professions and trades – who believe that, and act as if, they are superior to those who are not “initialed”.

There is no question that a person who has received the EA credential should be proud of his/her accomplishment.  But it does not automatically make him/her “better” than an unenrolled preparer, or a current or potential RTRP. 

Anthony Amelio posted the following comment at the NJ-NATP Spacebook group (because of NJ-NATP Board member Jaimee Hammer I broke my longstanding promise and joined Spacebook, without listing any personal information or profile, for the sole purpose of joining the NJ-NATP group).

In regards to this RTRP, I have (or had) the designation. I did my studying, had my 30 plus years’ experience and passed. At first I was annoyed to have to take an exam, but when I was still in the study phase I began to change my opinion in that it would be nice to have a designation after your name. At the time it would also mean I had some authority to deal with certain grade levels of the IRS.

In regards to the EA designation I have to tell a quick story. When I was first starting to study I came across a YouTube video and I do not recall the name of the guy, but he was giving a sample study class for RTRP. He back then made the comment in detail in essence stating that the EA title was becoming less and less of an important designation for EA's and that in future years RTRP would overtake the EA's. He was very knowledgeable and his point was that the EA lack of visibility was not just starting but has been decaying over the years.

In so far as the RTRP voluntary program, I may be prejudiced since I passed the exam, but I believe it is a valuable program and benefits everyone, including the IRS and prospective clients. I can understand the response we are getting from the EA since they worked hard to get the distinction. Quite frankly I would rather be an EA than an RTRP, but I took what was best for me considering age, etc. If you take in total the number of returns prepared by an EA and the RTRP people I think this tells the story of where the masses are.

In conclusion I think the EA continues on, the Voluntary RTRP is created and continues on. With the millions of people in this country there is enough client potential out there. We all need to work together since we all have the same goals and objectives. If there is any real concern out there we better start looking at the obvious problems that are beginning to confront tax preparers. I see in my own practice that many older clients are not around anymore and this includes to baby boomers and after them the new generation wherein many many people are turning to software programs, TurboTax, TaxCut etc., to do their taxes. Ironically these are the same companies that are selling us their professional software at premium prices and at the same time cutting in to our businesses.

I do agree with the person in the referenced YouTube video that, unfortunately, the EA credential's lack of visibility been decaying over the years. This is the fault of the IRS and the NAEA for not properly promoting and explaining the credential. I have done my best to explain the EA here at TWTP.

FYI, Chuck McCabe of the Income Tax School adds his voice to the conversation in “Will Tax Preparers Be Regulated in the Future?” at the School’s TAX INDUSTRY TALK blog.

Jason Dinesen “tweeted” -

If you want to get a 3rd party to oversee RTRP, I say go for it. I'm still not seeing where there's a need or demand, though.”

I do see a need and demand, and feel I have explained this sufficiently in my post.

Fellow “unenrolled” tax preparers – would you apply for a voluntary RTRP-like credential is it was offered, either by the IRS or an independent organization?



Anthony DiPierro, EA said...

I think I agree with pretty much all the points you've made, even the ones you made after saying you took exception to something I said. (I think maybe my double-negative was just unclear.)

That said, I didn't see anything to cause me to change my position. I would only support an RTRP designation if it was at least as difficult to pass as the non-representation portions of the SEE (the EA test). Along with that is that no one is grandfathered in other than possibly those who have already passed the SEE.

And I don't support changing the EA title to Enrolled Tax Return Preparer. If you want to make it Enrolled Taxpayer Representative, I'd be fine with that, but EAs are licensed for more than just tax preparation. If an EA wants to focus mainly or exclusively on tax preparation, then they can take the RTRP exam, or maybe even be exempt from taking it. But I want my credential to continue to reflect what I am licensed to do - represent taxpayers before the IRS.

Really I think there are two issues here, and they shouldn't be combined: 1) The word "Agent" confuses people. 2) Non-CPA tax preparers, mostly EAs but also some unenrolled preparers such as yourself, want a designation which reflects their expertise in tax preparation.

The solution to 1 is Enrolled Taxpayer Representative or somesuch. The solution to 2, if anything, is a separate designation with a test which is at least as hard to pass as the tax prep portions of the SEE. I'm somewhat ambivalent about 2 being operated by the federal government, though. If we could guarantee that they'd do it right, that they'd run the program cost efficiently, that the taxpayer would never pay for any of those costs, and that it'd never be used as an excuse to force preparers to obtain the designation, I guess I'd support it. But I'm not sure the federal government is capable of accomplishing that.

Robert D Flach said...


I think "Enrolled Taxpayer Representative" is a good alternative to "Enrolled Agent".

To provide clarity for EAs who prepare tax returns, under the 2-tiered IRS-sponsored program one would be designated both RTRP and ETR.

And current EAs who want a credential to identify tax preparation competence could request and receive the RTRP designation in addition to their EA (now ETR) via "grandfathering" (i.e. no required test).

And, of course, as you say, tax preparers would not be forced to receive any designation. It would be a truly voluntary program.