AFSP - Am I Exempt or Non-Exempt?

What does "exempt" mean?

The term "exempt" related to the IRS Annual Filing Season Program (AFSP) does not mean exempt from the the program itself.  It just means you are exempt from one part of the program:  the Annual Federal Tax Refresher (AFTR) course, which is a 6-hour course with a timed final exam.

The category of preparers called "credentialed preparers" are not expected to participate in the AFSP at all, and could be considered "exempt" from the entire program.

Who are credentialed preparers?

A credentialed preparer is a:

  • Certified Public Accountant,
  • Enrolled Agent,
  • Enrolled Retirement Plan Agent,
  • Enrolled Actuary or
  • Attorney.

The AFSP program is not intended for credentialed preparers who already possess a much higher level of qualification. These preparers are still allowed to participate in the program, and they are required to meet the same CE requirements as preparers in the exempt category.

Although there is no cost associated with obtaining a record of completion for the AFSP, and many credentialed preparers would already have the necessary CE to meet the standards, there is very little benefit to obtaining the record of completion. The database that the IRS is setting up of tax preparers with qualifications will already include practitioners with recognized credentials and higher levels of qualification and practice rights, if they are registered with the IRS.

Who is exempt from the AFTR course?

The IRS recognizes it that some individuals have already studied for and passed state based tax preparer certification tests. Additionally some preparers have obtained credentials that indicate they have a solid basic knowledge of federal tax law.

The following tax preparers are not required to take the basic level course called the Annual Federal Tax Refresher (AFTR) to meet the voluntary CE standards.

Registered Tax Return Preparers

Anyone who passed the RTRP test administered by the IRS from November 2011 to January 2013.

State registered return preparers

Return preparers who are active registrants of:

  • Oregon Board of Tax Practitioners
    • Licensed Tax Consultant (LTC)
    • Licensed Tax Preparer (LTP)
  • California Tax Education Council (CTEC) or
  • Maryland State Board of Individual Tax Preparers (MITP)

3  Certain credentialed professionals

Individuals who have obtained credentials from the Accreditation Council for Accountancy and Taxation:

  • Accredited Business Accountant/Advisor (ABA)
  • Accredited Tax Preparer (ATP)

Passed Part 1 of the Special Enrollment Exam for Enrolled Agents

Tax practitioners who have passed the SEE Part 1 within the past two years.

VITA volunteers

Quality reviewers and instructors with active PTINs.

What is the benefit of being classified as exempt?

If you are classified as exempt according to the classifications listed above, you are exempt from taking the Annual Federal Tax Refresher (AFTR) course. The AFTR course is a six hour course and in addition to completing the materials, you must pass a 100 question exam within a three hour time limit. You are allowed to retake the exam an unlimited number of times, however each exam must contain a mix of different questions.

In addition to saving six+ hours of your time, your spared the expense of purchasing an extra course

Which courses should I take?

CPE providers are only allowed to offer the 6-hour AFTR course in the second half of the year, to ensure that courses taken in preparation for the coming tax season are up-to-date.

You can take all other courses for the AFTP program at any time during the year, and must complete all courses by December 31st.