WASHINGTON The Internal Revenue Service recently marked the third anniversary of its return preparer initiative and urged those paid who are required to pass a new competency test to take it as soon as possible.

WASHINGTON The Internal Revenue Service recently marked the third anniversary of its return preparer initiative and urged those paid who are required to pass a new competency test to take it as soon as possible.

On June 4, 2009, IRS Commissioner Doug Shulman launched a six-month review focusing on the competency and conduct of paid tax return preparers.

Among the initiative highlights:

Mandatory registration and use of a Preparer Tax Identification Number (PTIN): Anyone who is paid to prepare, or help prepare, all or substantially all of a federal tax return now has to register with the IRS and obtain a PTIN, as do all enrolled agents. The PTIN is valid for a calendar year and must be renewed annually.

Competency Test: In November 2011, a 120-question basic competency test was launched. Certain preparers are required to take the test by Dec. 31, 2013, to stay in business. Certified public accountants, enrolled agents and attorneys are exempt from the test.

Continuing Education (CE): The preparers who have a testing requirement also have a new requirement to complete 15 hours of continuing education courses each year. More details are available at www.irs.gov/taxpros/ce.

Ethics and Tax Compliance: Ethical requirements that previously applied only to CPAs, EAs and attorneys now apply to all paid return preparers. All paid preparers also will undergo a tax compliance check and are subject to the standards for practice outlined in Treasury Department Circular 230.

Registered Tax Return Preparer: Preparers who pass the competency test and tax compliance check are given a new credential: Registered Tax Return Preparer. Beginning in 2014, only Registered Tax Return Preparers, Enrolled Agents, Certified Public Accountants, and attorneys will be authorized to prepare individual income tax returns for compensation.

Public Database: The IRS also will create a publicly searchable database that will allow taxpayers to see if their tax preparers have met IRS standards or to find a tax preparer in their zip code area.

Details: Visit www.irs.gov/taxpros/tests and select RTRP test.