The IRS is warning that a critical deadline is approaching.
This time, it’s not for tax filers – it’s for people who prepare tax returns professionally.
The Internal Revenue Service this week said 6,245 Indiana tax preparers – 95 percent – haven’t yet passed a minimum competency test that is required as of Jan. 1, 2014. Only 314 preparers in the state have taken and passed the exam, although the agency can’t provide data for individual cities or counties.
The IRS is urging those who fall under the new requirement to schedule their tests soon or risk not finding a convenient place or time to take it.
If too many preparers delay, available seats will be scarce, the federal agency warned.
Indiana has eight sites that offer the test. The only northeast Indiana location is in Fort Wayne. Mishawaka is the next-closest site.
Tests are offered daily by appointment.
Chris Kaehr is one of those who has put off taking the 120-question, 2 1/2 -hour exam that covers Form 1040 issues, individual tax law issues and ethics.
But her boss isn’t worried.
For the last 26 years, Kaehr has worked for Rebecca Cochran, a certified public accountant who practices in Decatur. As a CPA, Cochran doesn’t have to take the test. Lawyers and enrolled agents are also exempt because they must pass other, rigorous tests.
Cochran is confident her employee can handle the requirement, which will be a kind of seal of approval for tax preparers.
It will weed out the people who don’t know what they’re doing. Cochran said. I don’t think it will be any problem for (Kaehr) to pass it.
Kaehr plans to take the test before the end of the year. Cochran, who plans to pay the $116 fee, hasn’t thought about promoting the accomplishment after Kaehr passes, because all preparers will have to demonstrate their ability by January 2014 or give up doing tax returns.
Accounting professionals applaud the new requirement.
Gary Bolinger, president and CEO of the Indiana CPA Society, said his Indianapolis-based association supported testing tax preparers for minimum competency as a way to protect the public from those who aren’t adequately trained or skilled.
H&R Block spokeswoman Teresa Clark said the nationwide tax preparation service also supports the IRS initiative because we believe it will raise the standards and accountability for all tax preparers.