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The IRS has released details about the registered tax return preparer exam. Availability of online scheduling for the exam is expected soon. Testing will occur at centers provided by Prometric, a third party administrator of professional examinations.

Tax preparers are required to pass the competency exam in order to use the designation of Registered Tax Return Preparer. The IRS goal is assurance of basic preparer competency in meeting ethical responsibilities for tax reporting. According to the IRS, the RTRP exam 2011 relies upon 2010 tax forms and publications.

Test specifications reveal the various exam sections and percentage of questions weighted to each. The IRS has provided examples of the items covered in each testing domain. However, RTRP exam study material should address every frequently encountered subject in tax preparer work. The IRS examples are not all inclusive of the tax preparer exam questions.

Issues relating to collection of taxpayer data account for 15 percent of the exam. This includes review of the prior year return for accuracy and identifying carryovers. Most significant is gathering taxpayer details such as marital status, dependents, citizenship, and birth dates. These points are utilized to determine filing status, exemptions, and eligibility for certain tax credits.

Questions regarding tax treatment for various types of income cover 22 percent of the exam. Test takers must comprehend special treatments for retirement income, rental income, self-employment income, and capital gains. This section also addresses income adjustments that do not require itemizing deductions.

Tax credits and itemized deductions comprise another 22 percent of the RTRP exam. The credits covered include the child tax credit, child and dependent care credit, and the earned income tax credit. As expected, thorough knowledge of the categories and limitations for itemized deductions is essential to become a certified tax preparer.

Understanding other taxes - such as self-employment tax, alternative minimum tax, and additional tax on early withdrawal from retirement plans - covers 11 percent of the test. Another 10 percent is comprised of facts about the tax filing and payment process. Five percent of the exam is general tax preparer duties. This includes the subjects of retaining copies, signing returns, using PTINs, and completing the EITC checklist.

Fully 15 percent of the RTRP examination covers tax preparer ethics. Among the topics are due diligence in gathering taxpayer data, dealing with IRS requests for information, record keeping, prohibited practices, and the requirements stated in IRS Circular 230.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

Fast Forward Academy is a leading publisher of education for registered tax return preparer exam and tax professionals. Access to free questions for the Registered Tax Return Preparer is available on their website.

By Sawyer Adams
Article Source: http://EzineArticles.com/?expert=Sawyer_Adams