Among the questions IRS asked vendors was, "Would we be willing to assist customers in getting continuing education," says John Sapp, marketing VP for Franklin, N.C.-based Drake Software. That wasn't surprising. But what was more critical was another question. Sapp said Drake was asked, "Would we be willing to help them enforce the requirements, by not selling tax software to people who are not certified or qualified. We answered, 'Yes to both of them.'
Almost all software vendors, along with the tax franchises, have educational courses for preparers. So it's not a new element. But they may have to adjust their offerings.
CCH Small Firm Services has a 45-hour federal income tax curriculum that includes tax law, tax law changes and ethics material. That's the same lineup required by California, says Gene Goldenberg, marketing VP of the CCH unit.
He notes that besides helping preparers fulfill the CPE requirements his company will help them train for the certification test itself. Goldenberg's group is considering new Webinars along with Webinars blended with self-study. About 60 percent of SFS's customers are CPAs and EAs, leaving a considerable number who would likely subject to the IRS requirements.
Intuit will also probably provide some of its own courses, but may consider partnering with another provider for the rest, according to Bill Whitson, program manager, accountant training and relations.
"We are going to get you [preparers] a provider for a prep course if we can’t do it ourselves," says Whitson. He believes Intuit can provide the tax update portion of the necessary curriculum and he thinks the vendor will be an important resource for those affected. Whitson continues, "I think they are going to turn to us to help through the transition."
The problem is that "what we don't know today is the when, what and how," says Ken Koskay, the SVP who runs the CPE operations for the tax and accounting business of Thomson Reuters. He says the IRS has issued a request for proposal for providers to help develop a registration system which refers to the administration of a competency exam and continuing education.
Although there is an expectation that some decisions should be made by September, "Here it is mid-April and there is no further information on what the competency exam needs to be what it will cover, what it will cost and what the transition period would be," Koskay muses.
Like others, Koskay says existing content means Thomson Reuters will be able to provide the CPE fairly easily; it will probably create a separate educational track to serve the preparers who face these requirements.
How large is the market? There are estimates of 250,000 to 500,000 preparers. Koskay says through its Gear Up business Thomson knows that there are many unlicensed preparers. The question is how many, especially low-volume preparers, will be willing to go through the process.
"I suspect once the final regulations are issued there will be a number of people who will decide it’s not worth it,"