CE Credits: 10 Federal Tax Law, 2 Regulatory Ethics, 6 AFTR
Deadline: LTP encourages you to complete this course by December 29th to allow time for reporting credits and any support. The IRS deadline to complete is December 31st*.
Our Annual Filing Season Program (AFSP) qualifies for 18 hours of continuing education needed to earn an AFSP Record of Completion from the IRS. Some of the perks a tax preparer will receive upon completion are: limited representation rights, a certificate directly from the IRS to display, and your name added to the official IRS tax preparer directory.
To fulfill requirements, you must take the AFTR which consists of a 100 question, 3-hour timed exam, and complete it with a score of 70% or better.
*The IRS deadline to complete this course is December 31st at midnight your local time, however, keep in mind our office will be closed on 12/31. Hours that are completed by the IRS deadline will be reported on the following business day.
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Part I: Ethics Due Diligence and Penalties
This chapter will explain how to determine who qualifies as a tax return preparer, what representation rights a preparer has, how that individual is bound by the Circular 230 guidelines, and what it means for a tax preparer to behave ethically and responsibly.
Part 2: Federal Tax Law
The IRS has the authority to tax all income from whatever source it is derived. This includes compensation for services, gains from dispositions of property, interest and dividends, rent and royalties, pensions and annuities, gambling winnings, and even illegal activities. All such income a person receives is collectively referred to as “worldwide income.” However, not all money or property is taxable or subject to tax. This chapter will cover the different types of taxable and nontaxable income and show you where and how to report such wages on a professionally prepared tax return. A tax professional must recognize the different kinds of taxable income, tax-exempt income, and other income included in Schedule 1, line 21, and must know how to figure out the taxable percentage on Social Security benefits.
Tax Credits and Payments
A nonrefundable tax credit reduces the amount of tax liability that may have to be paid. Unlike a deduction, which reduces the amount of income that is subject to taxation, a credit directly reduces the tax itself. There are two types of credits: nonrefundable, which cannot reduce tax liability below zero, and refundable, which can reduce tax liability below zero, resulting in the need for a refund.
This chapter provides an overview of miscellaneous taxes from the Form 1040 and reported on Schedule 2 that a taxpayer might be assessed. This includes excess Social Security tax, additional taxes on IRAs, the Alternative Minimum Tax, and household employment taxes.
This chapter encompasses how the sole proprietor reports income. Sole proprietorship is the most popular business structure. A sole proprietorship is indistinguishable from its owner, and all income earned is reported by the owner. Schedule C is the reporting tool for most sole proprietors. Covered in the course is line by line instruction to complete the Schedule C.
Rental income is any payment received for the use or occupation of real estate or personal property. The payment that is received is taxable to the taxpayer and is generally reported on Schedule E. Each Schedule E can report three properties. If the taxpayer has more than three properties, additional Schedule E’s would be used. Schedule E is not used to report personal income and expenses. The taxpayer should not use Schedule E to report renting personal property, that is not a business. To report other income, use Schedule 1, lines 8 – 24b.
Income received from the operation of a farm or from rental income from a farm is taxable. Farmers determine their taxable income from farming and related activities by using Schedule F. Profit or loss from farm income is first reported on Schedule F and then “flows” to Form 1040, Schedule 1, line 6. This course covers basic farm income and expenses.
Part 3: Annual Federal Tax Refresher
The Annual Federal Tax Refresher (AFTR) course is intended to prepare the individual for the upcoming tax year. This course covers the latest tax law changes and current tax issues, as well as practice and professional responsibility. This course follows the 3 domains that are set annually by the IRS. They include:
- New Tax Law/Recent Updates
- General Review
- Practices, Procedures and Professional Responsibility
At the end of this section, the student will be able to do the following:
- Understand limited representation rights.
- Recognize the annual inflation rates for the standard deduction.
- Comprehend the difference between business vs hobby.
- Identify taxpayers who qualify for a federally declared disaster area.
How do I obtain an AFSP-Record of Completion?
- Take a six (6) hour Annual Federal Tax Refresher (AFTR) course that covers filing season issues and tax law updates, as well as a knowledge-based comprehension test administered at the end of the course by the CE Provider.
- Take ten (10) hours of other federal tax law topics; and
- Take two (2) hours of ethics.
- Have an active preparer tax identification number (PTIN).
- Consent to adhere to specific practice obligations outlined in subpart B and section 10.51 of Treasury Department Circular No. 230.
How and when will I get my Record of Completion?
- After PTIN renewal season begins in October, a Record of Completion will be generated to you once all requirements have been met, including renewal of your PTIN and consent to the Circular 230 obligations.
- If you have an online PTIN account, you will receive an email from TaxPro_PTIN@irs.gov with instructions on how to sign the Circular 230 consent and receive your certificate in your online secure mailbox.
- If you do not have an online PTIN account, you will receive a letter with instructions for completing the application process and obtaining your certificate.
Who is exempt from taking the AFSP course?
- Anyone who passed the RTRP test administered by the IRS between November 2011 and January 2013.
- Established state-based return preparer program participants with testing (Oregon, California, and Maryland).
- Those who have passed SEE (Special Enrollment Exam) Part 1 within the past 2 years.
- VITA/TCE volunteers: quality reviewers and instructors with active PTINs.
- Other accredited tax-focused credential holders such as the following:
- The Accreditation Council for Accountancy.
- Taxation’s Accredited Business Accountant/Advisor (ABA).
- Accredited Tax Preparer (ATP).
I meet one of these exemptions. How do I obtain an AFSP – Record of Completion?
- Take fifteen (15) hours of continuing education, including:
- three (3) hours of federal tax law updates,
- ten (10) hours of other federal tax law topics and
- two (2) hours of ethics.
- Have an active preparer tax identification number (PTIN).
- Consent to adhere to specific practice obligations outlined in Subpart B and section 10.51 of Treasury Department Circular No. 230 PDF.
Included in this course
To earn certificate of completion:
• Pass final exams with 70% (or better)
• 3-Part Chapters (eBook)
Learn at your own pace, read or watch the lessons, pass the exams.
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