According to the IRS, more than 80 percent of taxpayers either use a paid preparer or third-party software solution to complete their individual tax return. Professionals in the industry like CPAs, Enrolled Agents and Attorneys who prepare returns are presently subject to IRS oversight. The rest of the tax preparer community is not. That’s right... under current law, many tax preparers do not have any accountability to the IRS!
Until now, the two states of California and Oregon have created and enforced systems that call for tax preparer registration. In 2010 Maryland and New York will join their ranks and will begin registering tax preparers. It is expected that a similar system will be in force nationwide in the not-so-distant future.
As a Franchise Owner, I am thrilled with the prospect of assessing the competency and ethical standards of those working among us. I believe that tax preparer registration will quickly weed out the most incompetent preparers as well as many of those who knowingly file fraudulent returns. A testing process would be cumbersome but would also be crucial to ensuring that tax preparers understand the high ethical standards to which they are accountable. Lastly, I feel that continuing education will be the most important way to make sure that preparers are up-to-date on recent tax law changes and compliance issues. I believe a minimum requirement for hours of ongoing education should be required annually for anyone registered under the new system.
At Liberty, we continue to enforce our own internal system that has been in place for years. All preparers are required to meet an initial level of certification before they can work with a customer. There are opportunities to reach higher certification levels through experience and ongoing training. I am confident that our current family of preparers will easily transition into whatever system the IRS enforces.
In a series of three public forums, The IRS has been working to seek comments from the tax preparer community as well as the general public on this issue. The final forum was held September 30, 2009 in Chicago. It is expected that a proposed plan will be announced by the end of this year. In the meantime, be sure to get to know your preparer by asking them questions about their training and certification. Chances are, they feel much like I do about the coming changes.... encouraged to know that we will all be held to the same set of standards very soon. Stay tuned!!!
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.