4 Steps to Become an Appointed Representative

Last Updated on May 27, 2022 by Joshua Isibor

Becoming an appointed representative is a great way to advance your career as an accountant. Appointed representatives play an essential role in tax preparation, because they can review and sign documents on behalf of the client. Becoming an appointed representative requires meeting certain education and work experience requirements set by the IRS. The process of becoming an appointed representative isn’t difficult once you know what steps are required. Here are four steps to become an appointed representative:

Know the requirements.

There are a few requirements you need to meet to become an appointed representative. You must have earned a minimum education requirement, completed a training course, and have two years of work experience under IRS rules.

Find a sponsor and apply.

The first step to becoming an appointed representative is finding a sponsor. A sponsor is someone who has been an appointed representative for two years and applied on behalf of 10 taxpayers. Your sponsor will be required to submit an IRS Form 56 that outlines the requirements for becoming an appointed representative. The sponsor will also be responsible for overseeing your tax preparation work and ensuring you are following the rules. You will need to apply for your EIN and register for a new user name and password in the RTRS system.

Go through training and testing.

The next step to becoming an appointed representative is going through training and testing. You must complete training on federal tax concepts, such as: – The role of appointed representatives. – Tax return preparation and documents. – Penalties and information reporting. – Taxpayer rights and IRS correspondence. After completing the training, you will be required to take a test to show your knowledge of the federal tax concepts. You will be required to take the test three times to pass it.

Become a registered AR.

After completing the training and testing, you will become a registered appointed representative. The last step is to sign a declaration and become a registered appointed representative. When you become an appointed representative, you can help clients with various tax situations such as: – Tax return preparation. – Representing clients before the IRS. – Preparing amended returns. – Filing a Form 1040X, to amend a tax return. – Filing a Form 843, to request a refund. – Filing a Form 1040, to file a tax return. – Filing a Form 4852, to request an extension to file a tax return.

Final Words

Becoming an appointed representative can be a great way to advance your career and start your own business. Appointed representatives play an essential role in tax preparation, because they can review and sign documents on behalf of the client. Becoming an appointed representative requires meeting certain education and work experience requirements set by the IRS.

The process of becoming an appointed representative isn’t difficult once you know what steps are required but it’s also important to know that there are other options out there. There are restrictions with becoming an AR and they can cause many limitations if your primary goal is to start your own business. If you are looking for more freedom and ownership, it may be more relevant to look into franchise opportunities that allow more flexibility.