How to Become a Tax Preparer: PTIN, EFIN, and Credentials

To become a tax preparer, you need to learn enough federal tax law to handle a return competently, then register with the IRS for a Preparer Tax Identification Number (PTIN) before you accept payment for preparing anyone’s return. The PTIN costs $18.75 per year and is the one universal federal requirement. Everything else, from an e-file number to state registration to advanced credentials, depends on how you plan to work and where.¹

Learn the Tax Law First

There is no federal college-degree requirement. A high school diploma is the legal minimum, and plenty of successful preparers started there. But once you sit down with a client’s financial records, you need real working knowledge of accounting basics and federal tax law.

Most new preparers get that knowledge from one of three sources: a college program in accounting or finance, a vocational tax course, or the training programs run by national tax preparation firms that hire seasonal preparers every year. Self-study using IRS forms and publications can fill gaps, though structured courses tend to move faster and cover more. Before you touch a client return, you should understand income reporting rules, standard and itemized deductions, tax credits, depreciation, and the mechanics of Form 1040.

Get Your PTIN

Federal law requires every paid preparer to include an identifying number on each return they prepare.² The PTIN is that number, and it replaces your Social Security Number on filed returns. No PTIN, no legal authority to prepare returns for compensation.

You apply online through the IRS PTIN system. The application asks for your Social Security Number, your personal tax filing history, and any felony convictions. Those disclosures feed a suitability check, and past problems with your own tax obligations or a criminal history can delay or block approval.³ The fee is $18.75 for 2026.¹

Your PTIN expires every December 31, and you must renew before that date to work the upcoming filing season.⁴ Preparing a return without a current PTIN carries a $50 penalty per return, capped at $25,000 in a calendar year.⁵

Add an EFIN If You Plan to E-File

Most clients expect electronic filing, and the IRS requires preparers above a certain volume to e-file rather than mail paper returns. To file electronically on behalf of clients you need an Electronic Filing Identification Number (EFIN) in addition to your PTIN.

The EFIN application has three steps. Create an account through the IRS e-Services portal, complete the application with your firm information and each principal or responsible official listed, and select “Electronic Return Originator” as your provider type. Then pass a suitability check that may include a credit review, tax compliance verification, criminal background check, and a review of any past e-file violations.⁶

One step catches people off guard. If you are not already a licensed attorney, CPA, or Enrolled Agent, you must submit fingerprints through the IRS-authorized vendor before your application moves forward. You schedule a livescan appointment after submitting the application. Plan on up to 45 days from submission to approval.⁶

Check Your State’s Rules

A PTIN authorizes you to prepare federal returns. It does not automatically clear you to prepare state returns everywhere. A handful of states impose their own registration, testing, or bonding requirements on top of the federal ones, and the rules apply based on where your clients are, not just where you sit. That means state requirements can follow you when you file electronically for out-of-state clients.

State mandates vary but can include a competency exam, state-specific continuing education, a registration fee, and a surety bond. Registration fees generally run from about $33 to $100 per year, and bond premiums for typical required amounts run roughly $50 to $200 per year for preparers with clean records. The bond protects your clients, not you: if the state requires one, it guarantees a payout to consumers harmed by fraud or negligence. CPAs, Enrolled Agents, and attorneys are often exempt from bonding because their existing licensure already carries disciplinary mechanisms.

Before you take on clients in a new state, check that state’s tax agency or regulatory board. Ignoring state rules can result in fines or an injunction barring you from practicing there.

Decide Whether to Pursue an Advanced Credential

A PTIN alone lets you prepare and file returns. It does not let you represent clients if the IRS sends questions or an audit notice. For representation rights, you need a higher-level credential. Three options matter.

Enrolled Agent

The Enrolled Agent (EA) designation is a federal credential issued by the IRS itself, and it grants unlimited representation rights before any IRS office nationwide, covering audits, collections, and appeals.⁷ Because it comes from the IRS rather than a state board, it works in every state without additional applications.

You earn it by passing the three-part Special Enrollment Examination, which covers individual taxation, business taxation, and representation practices. The scaled passing score is 105 out of 130, and you must pass all three parts within three years.⁸ After passing, you go through a suitability check reviewing your personal tax compliance and criminal background. There is no college degree requirement, which makes the EA the most accessible advanced credential for career changers.

Certified Public Accountant

CPAs are licensed at the state level and hold authority that extends well beyond tax preparation into auditing, financial reporting, and attestation. Most states require 150 semester hours of college credit, passing the four-part Uniform CPA Examination, and one to two years of supervised work experience. A CPA license automatically grants the right to represent clients before the IRS under Circular 230.⁹ If your long-term goal is a full accounting practice rather than tax alone, the CPA is the stronger credential.

Annual Filing Season Program

The IRS created the voluntary Annual Filing Season Program (AFSP) for PTIN holders who have not earned an EA or CPA credential. Completing the AFSP earns you a Record of Completion and limited representation rights: you can represent clients whose returns you prepared and signed before revenue agents, customer service representatives, and the Taxpayer Advocate Service.¹⁰

Without the AFSP or another credential, a PTIN holder can only prepare returns. They cannot represent clients before the IRS at all, even for simple inquiries about a return they prepared.¹⁰ That distinction matters more than most new preparers realize. Clients who get an IRS notice call you first, and if you cannot speak to the IRS for them, they will find someone who can.

Set Up a Written Information Security Plan

Under the Gramm-Leach-Bliley Act, tax preparers are classified as financial institutions regardless of size, and the FTC’s Safeguards Rule requires every financial institution to maintain a Written Information Security Plan (WISP).¹¹ A solo preparer working from a home office needs one just as much as a large firm does.

At a minimum, the plan must name a specific person responsible for your security program, identify where you store client data and what threats exist, put safeguards like encryption and multi-factor authentication in place, and set a process for regularly testing and updating those safeguards.¹² The IRS publishes a free template, Publication 5708, that walks small practices through building a WISP from scratch. Completing it takes hours, not weeks.

Know the Penalties Before You Sign a Return

The IRS holds preparers personally accountable for the accuracy and integrity of the returns they file. The penalty structure makes cutting corners more expensive than doing the work right.

Due Diligence on Credits and Filing Status

When a return claims the Earned Income Tax Credit, Child Tax Credit, Additional Child Tax Credit, American Opportunity Tax Credit, or head-of-household filing status, you must verify eligibility, evaluate whether the information makes sense, ask follow-up questions when something looks inconsistent, and document everything.¹³ You also complete Form 8867, the Paid Preparer’s Due Diligence Checklist, and keep it along with supporting worksheets and client records for three years.

The penalty for failing due diligence is $650 per failure for returns filed in 2026.¹⁴ A single return claiming both the EITC and head-of-household status can trigger two $650 penalties if you missed due diligence on both.

Understating a Client’s Tax

If you take an unreasonable position that understates a client’s tax, the penalty is the greater of $1,000 or 50% of the fee you earned on the return. If the understatement results from willful or reckless conduct, the penalty rises to the greater of $5,000 or 75% of the fee.¹⁵ These penalties hit you personally, not your client.

Administrative Penalties

Smaller infractions carry their own fines. Failing to sign a return you prepared triggers a $60 penalty per return, capped at $31,500 per year. Failing to include your PTIN costs $50 per return, capped at $25,000.⁵ They stack across every return where the violation happens.

Keep Up With Continuing Education

Tax law changes every year, and the IRS expects preparers to keep pace. How much continuing education (CE) you owe depends on your credential.

Enrolled Agents complete 72 hours per three-year renewal cycle, with at least 16 hours each year, and two of those annual hours must cover ethics.¹⁶ CPAs follow their state board’s schedule, which varies but typically runs 40 hours per year including an ethics component.

Non-credentialed preparers who participate in the AFSP complete 18 hours of CE annually: a six-hour Annual Federal Tax Refresher course with a test at the end, 10 hours of federal tax law topics, and two hours of ethics, all from IRS-approved providers.¹⁷ Keep records of every completed course, including provider name, course title, and date. If the IRS or a state board audits your compliance, you will need to produce them.

1
Internal Revenue Service. PTIN Top FAQ 4
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Office of the Law Revision Counsel. 26 USC 6109 – Identifying Numbers
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Internal Revenue Service. PTIN Application Checklist – What You Need to Get Started
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Internal Revenue Service. Tax Professionals Have Until Dec 31 to Renew Their Preparer Tax Identification Number
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Office of the Law Revision Counsel. 26 US Code 6695 – Other Assessable Penalties with Respect to the Preparation of Tax Returns for Other Persons
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Internal Revenue Service. Become an Authorized e-File Provider
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Internal Revenue Service. Enrolled Agent Information
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Internal Revenue Service. About Becoming an Enrolled Agent
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Internal Revenue Service. Office of Professional Responsibility and Circular 230
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Internal Revenue Service. Annual Filing Season Program
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Internal Revenue Service. IRS, Security Summit Remind Tax Pros They Must Have a Written Information Security Plan to Protect Client Data
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Internal Revenue Service. Creating a Written Information Security Plan for Your Tax and Accounting Practice
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Internal Revenue Service. Due Diligence Requirements for Tax Preparers
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Internal Revenue Service. Consequences of Not Meeting the Due Diligence Requirements
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Office of the Law Revision Counsel. 26 USC 6694 – Understatement of Taxpayers Liability by Tax Return Preparer
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Internal Revenue Service. FAQs – Enrolled Agent Continuing Education Requirements
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Internal Revenue Service. General Requirements for the Annual Filing Season Program Record of Completion