A Tax Preparer Told a Client IRAs Are 'Only for Married People.' She Wasn't an EA.
Last week on r/tax, a soon-to-be accountant caught something alarming in their mother's return.
The preparer classified 80% of her personal miles as business expenses. Depreciated her personal vehicle on Schedule C. Told her she could not deduct Traditional IRA contributions because they are "only for married people." Line 20 of Schedule 1 says something about married filing separately, so he assumed it did not apply to single filers.
He was not a CPA. He was not an EA.
He had a PTIN. That is it. A Preparer Tax Identification Number costs $19.95 and requires no exam, no education, and no demonstration of competence. You fill out a form online and the IRS issues you a number.
The poster, studying for the REG section of the CPA exam, caught every error. Their mother, like most taxpayers, had no idea her preparer was not qualified. She assumed anyone who does taxes must be licensed.
They are not.
The PTIN Loophole
In the United States, anyone with a PTIN can prepare tax returns for compensation. There is no federal competency requirement. No exam. No continuing education. No minimum training.
Some states impose their own requirements. Oregon requires tax preparers to pass a test and complete annual CE. California requires minimum hours through an approved provider. Most states require nothing.
The IRS has tried to fix this. In 2011, the agency introduced mandatory competency testing and continuing education for all paid preparers. A federal court struck it down in Loving v. IRS, ruling the IRS lacked statutory authority to regulate preparers without explicit congressional authorization.
Congress has never passed the authorizing legislation.
Your tax preparer might know less about taxes than you do. And you would have no way to know.
Hairdressers Need a License. Tax Preparers Don't.
A commenter in the thread put it bluntly. Hairdressers have stricter licensing requirements than tax preparers.
Across all 50 states, cosmetologists need hundreds of hours of training, a skills exam, and continuing education. They can face license revocation for malpractice. They work on hair.
Tax preparers work on your financial liability to the federal government. No license required.
The other side of this is worse. When the IRS audits a return, the taxpayer bears the burden. Not the preparer. The preparer who deducted 80% of personal miles as business expenses faces no direct consequence from the IRS. The taxpayer who signed the return does.
What the EA Credential Means
An Enrolled Agent is a federally licensed tax practitioner. The credential comes from passing a three-part exam covering individual tax, business tax, and representation before the IRS. Unlimited practice rights. Any taxpayer, any tax matter, any state.
The EA is the highest credential the IRS issues.
When you hire an EA, you are hiring someone who has demonstrated competence across the full tax code. Not someone who bought a $19.95 PTIN and hung a shingle.
The EA exam has a passing rate around 70% per part. The credential requires 72 hours of continuing education every three years, including two hours of ethics. EAs can lose their license for misconduct.
This is not gatekeeping. It is the floor. The minimum a taxpayer should expect from someone handling their exposure to the IRS.
The Errors That Slip Through
The r/tax thread is not unique. EAs and CPAs in the comments confirmed they see similar errors from new clients all the time. One EA noted that when they find something completely outlandish in a prior year return, the preparer is almost always a CPA firm, not a random PTIN holder. CPAs know enough to break the rules creatively.
But the random PTIN errors are different. They are basic. IRA deduction rules. Depreciation schedules. Business use percentages. Things that appear on the SEE exam for a reason.
The CPA candidate's mother overpaid taxes because of these errors. The Schedule C fraud also carries potential criminal exposure, whether or not the taxpayer knew the return was wrong.
How to Check Your Preparer
The IRS maintains a directory of credentialed tax professionals. You can verify whether someone holds an EA, CPA, or attorney credential. If they only have a PTIN, they are not a licensed tax professional.
Three questions to ask.
- Do you hold an EA, CPA, or JD?
- Will you represent me before the IRS if I get audited?
- How many returns like mine do you prepare each year?
If the answer to question one is no, the answer to question two is also no. Only EAs, CPAs, and attorneys have unlimited representation rights. A PTIN-only preparer can prepare your return. They cannot defend it.
Related: PTIN → AFSP → EA: The Credential Ladder Nobody Explains · How to Become an Enrolled Agent in 2026 · What Makes a Good Tax Guy
Sources & Further Reading
Loving v. IRS, 742 F.3d 1013 (D.C. Cir. 2014) IRS Directory of Federal Tax Return Preparers IRS Enrolled Agent Information
EA Exam Prep Resources: Gleim · Hock International · Surgent · Fast Forward Academy