Accredited Tax Preparer (ATP) vs Annual Filing Season Program (AFSP)
Why Earn Your ATP
The Accredited Tax Preparer (ATP) and Annual Filing Season Program (AFSP) are designed to help tax professionals demonstrate competency, but they differ in purpose, requirements, and recognition.
The ATP credential is a more advanced, independent professional credential that reflects a higher level of tax knowledge and allows for a broader scope of representation, while the AFSP is an IRS-administered program offering a basic level of recognition primarily intended to demonstrate minimal competency for tax preparers. While the ATP is a credential that can be used after your name, the AFSP is not a credential.
Scope & Purpose
The Accredited Tax Preparer (ATP) exam is administered by the Accreditation Council for Accountancy and Taxation while the Annual Filing Season Program is administered by the Internal Revenue Service.
The ATP exam covers individual tax returns (Form 1040), tax credits, deductions, and other tax compliance issues.
It certifies a professional’s knowledge in basic tax preparation and planning, making it ideal for those focusing on individual tax preparation services.
The AFSP is designed to encourage tax return preparers to take continuing education and meet a minimum competency standard annually.
History
The Accredited Tax Preparer been managed by ACAT since 2001. The Annual Filing Season Program (AFSP) was introduced by the IRS in 2014 in response to a need for standardized qualifications among tax return preparers.
Representation Rights
Accredited Tax Preparers have limited representation rights before the IRS. They can represent clients whose returns they have prepared and signed, but only before revenue agents, customer service representatives, and other similar employees of the IRS, including the Taxpayer Advocate.
AFSP participants also have the same limited representation rights before the IRS. For individuals serving as tax preparers but not handling taxpayer representation matters, limited representation is usually sufficient.
Ongoing Costs
The Accredited Tax Preparer exam is a one-time $250, while AFSP Record of Completion can cost between $80 – $330 annually depending on the Continuing Education provider. The renewal fee for the ATP is $150 per year and other than reviewing your information and attesting to meeting the requirements, the renewal process can be completed in under 10 minutes. The AFSP requires demonstrating you’ve met all the requirements annually to complete the renewal which can be quite time consuming.
Exam Content
The Accredited Tax Preparer exam features one hundred (100) multiple choice questions and focuses primarily on individual tax preparation, including understanding tax deductions, credits, and how to prepare individual tax returns. The content of the ATP exam is tailored to professionals who prepare basic tax returns for individuals and small businesses. This exam is taken once.
To obtain an AFSP Record of Completion, preparers must complete an exam annually at the conclusion of a 6-hour annual federal tax refresher (AFTR) course.
Recognition
Those achieving the Accredited Tax Preparer designation and satisfying the renewal requirements, including earning continuing professional education, are exempt from the IRS Annual Filing Season Exam. This is unique to ACAT.
While the AFSP isn’t a designation, because it is an IRS program there is wide recognition of the program within the tax professional community.
Many hold the ATP designation in high regard as it is administered by an independent organization and not the Internal Revenue Service.
Application
Applying to sit for the Accredited Tax Preparer exam is a quick four-step application process that requires you to attest to meeting the relevant requirements.
There isn’t a formal application process for the Annual Filing Season Program (AFSP), but there are specific steps that tax preparers need to follow to earn the AFSP Record of Completion each year including completion of continuing education and passing the Annual Federal Tax Refresher (AFTR) course exam. This lengthy renewal process makes the ATP attractive for those looking to demonstrate a higher level of professionalism with their clients while minimizing administrative time spent completing paperwork.