Cryptic Ethics Credits

[Nashville]

Went to an NCPE tax seminar in Milwaukee last year. Good seminar, good speakers, curriculum, etc.

However, the "certificate" which delineated the number of credits did not mention Ethics credits, even though 2 hours of the curriculum was dedicated that Ethics. When I brought this to their attention they explained it away - saying ethics were part of their instruction agenda (and it was). Same thing with N Carolina State - no Ethics credit is documented.

I have since been told by NATP that the IRS is now "approving" Ethics curricula, and unless the curriculum is approved, the credentials cannot mention Ethics credit as part of the CPE. By contrast, if you take TTB Ethics course, they will send you documentation for the credit.

Any of you involved with CPE credentials tell us what is going on here?

[Koss]

CE Credits

From a technical standpoint, the information you were given is inaccurate. But I wouldn't worry about it too much. Here's why:

The entire system governing CE has changed dramatically. In the past, the CE provider did not report credits to the IRS. And the EA did not have to send in any documentation, unless they were selected for a random audit. I'm not even sure there was any auditing program. Both the provider and the EA were required to keep a record of the credits, but the IRS almost never asked to see any of the records. The EA had to "self-certify" when submitting their enrollment renewal.

That was the old system. You were given wrong information because under the old rules, the provider was required to issue a certificate that identified the type of course.

In theory, they might be able to argue that if the program syllabus or curriculum was attached to the certificate or incorporated by reference, then that was enough to document that ethics was included. But they should have specified how many hours were ethics on the certificate itself, or issued two separate certificates.

Nashville wrote:

Went to an NCPE tax seminar in Milwaukee last year.

For any CE courses that were taken in 2011 and earlier, the provider has no obligation to report any data to the IRS. They still have to keep records for three years. But they don't have to send anything to the IRS, and neither does the preparer.

You won't have to prove that you took the ethics course. In the unlikely event that you are selected for some sort of audit, the records of the curriculum should in fact be sufficient to show that you reasonably relied on the provider's representation that two hours of ethics were included.

Going forward, for 2012 and beyond, the rules are very different, and the rules are very clear. The provider must issue a certificate that identifies the course topic and the number of hours, and they must report the credits to the IRS. The IRS is issuing program numbers, and an ethics course will have a different program number than a federal tax course.

In the world of the IRS, program numbers contain letters as well as numbers.

Here are some actual program numbers for courses offered this year by the Greater Columbus Chapter of the Ohio State Society of Enrolled Agents:

VDYZG-U-00001-12-I -- Federal Tax Update
VDYZG-T-00006-12-I -- Case Studies in Correspondence Examinations
VDYZG-E-00005-12-I -- Ethics for Tax Practitioners

The update course has a U in it. The general tax course has a T. And the ethics course has an E.

VDYZG is the provider ID.

00006 means it is the sixth course that we registered with the IRS.

12 is the calendar year.

The letter I means that the course takes place in person (as opposed to online or self-study).

And just in case we couldn't figure this out on our own, the IRS actually published this chart:

http://www.irs.gov/pub/irs-utl/ce_provider_program_numbering_sequence.pdf

For 2012 and beyond, the IRS has issued guidance that says that the certificate must contain very specific information. They have even published a sample certificate:

http://www.irs.gov/pub/irs-utl/cesamplecertificate.pdf

All these new rules are effective in 2012. You don't have anything to worry about for courses you took in 2011.

By the way, the title I gave to this post means "Continuing Education Credits." It does not mean "Cryptic Ethics Credits."

BMK

[Nashville]

Thank You!

Burton - fabulous response!

Relevant to the question and goes right to the heart of the problem. Thanks.

[BOB W]

Is that the only catagories that CPE is allowed? U-T-E.

[Koss]

CE Categories

They also have a Q for Qualified Retirement Plan Matters, for Enrolled Retirement Plan Agents. and P for RTRP exam test preparation courses.

BMK

[erchess]

Interesting that

the IRS has not seen fit to attempt regulation of prep courses for the SEE. I wouldn't really have expected them to interfere with the CPAs about that exam or preparation courses or prep for the Bar or any subsequent test a state may require in order to call one's self a Tax Lawyer but I am surprised that they don't regulate the process of prepping for the SEE or grant the newly minted EA any CEUs for the course. (Can you still keep your EA credential despite doing inadequate CE if you pass the SEE again during the cycle?)

[Black Bart]

Say Burton,

...The letter I means that the course takes place in person (as opposed to online or self-study...).

Do you happen to know if IRS is requiring a minimum number of classroom hours for EAs as opposed to the online or self-study CPE?

As I understand it, prior to 2012, IRS didn't care where you got CPE as long as you got the minimum hours. However, some states (ours for instance) limit the number of self-study hours that accountants can use for their state licenses.

I was wondering if IRS is changing that and going to the stricter standards that some states have (I hope not -- seminar prices tend to be quite expensive nowadays). I'm still getting CPE about 50-50 but while you learn more in class, correspondence courses are about half the price (it's very comforting to have a choice).

[Snaggletooth]

3000 posts

Black Bart, you have just logged your 3000th post - May 28, 2012.

[JohnH]

That represents 3,000 bits of wit, wisdom, and whimsy - all of it entertaining, enlightening, and exceptional.

[S T]

And most of us are so "Happy" that Black Bart is back posting, whether it be his "whimsey" or "knowledge/wisdom.

He is from the Old Group - so I for one, have missed him terribly!

BB - Welcome Back!

Please keep positng! We do need your presence!

Sandy

[Black Bart]

Thanx to

..."the Old Group"...

Best Regards, BB

[Lion]

Congratulations, Black Bart, and thank you for all you share with us!

[Koss]

CE Requirements

Black Bart wrote:

Do you happen to know if IRS is requiring a minimum number of classroom hours for EAs as opposed to the online or self-study CPE?

As I understand it, prior to 2012, IRS didn't care where you got CPE as long as you got the minimum hours. However, some states (ours for instance) limit the number of self-study hours that accountants can use for their state licenses.

I was wondering if IRS is changing that and going to the stricter standards that some states have (I hope not -- seminar prices tend to be quite expensive nowadays). I'm still getting CPE about 50-50 but while you learn more in class, correspondence courses are about half the price (it's very comforting to have a choice).

The current rules, effective for 2012 and beyond, do not require any of the continuing education to be live classroom.

Certainly anything is possible, but I don't see this changing at any time in the near future.

The other aspect that is not likely to change is this:

With live classroom instruction, the provider is not required to administer an exam, because they are expected to have procedures in place to confirm that you were physically present for the duration of the course. In other words, they take attendance, or use a sign-in sheet. The procedures do not require participants to present identification. But there should be a basic system in place to document each person's attendance, and something that at least discourages unethical behavior such as signing into a three hour course and then leaving after only two hours. (Signing in with someone else's name and PTIN would be outright fraud.)

In contrast, online courses require an exam, but they do not require any process that monitors or documents the amount of time spent on the course. Here, the burden falls squarely on the provider, in that they simply should not be offering a 4-credit hour course for material that is clearly only worth one or two hours. But in the end, it is passing the exam that earns the credit, regardless of how much time you actually spent studying the material. The online platforms certainly have the ability to monitor how much time you spend working through the course. But I think everyone--including the IRS--recognizes that this is silly, because you could be studying the material offline.

And there really are people who prefer to study offline. They print out the course material, and they read it on paper, in a wing chair next to a fireplace, or perhaps on an airplane. Some do it this way because they find it more comfortable than reading on a screen. Others may choose this option because they have a slow internet connection.

So a guy might only be logged into the online platform for five minutes, just to print the material. A few days later, he logs in again, takes the exam, and gets four hours of credit. And it's totally legitimate.

BMK

[Black Bart]

Thanks much, BMK

and I fully agree with Nashville's view of your replies:

Burton - fabulous response!

Relevant to the question and goes right to the heart of the problem. Thanks.

[Ricardo]

Great

to have Black Bart posting again !

Was muchly missed =

Regards = Ricardo