Unlicensed Tax Preparers to Face Changes, Registration

The IRS announced last week that, starting with next year's filing season (TY 2010), all paid tax preparers who are not already recognized by the IRS will have to follow new guidelines. The proposal essentially creates a new category of professional preparer (acronym as yet unknown) who will be required to register, receive a preparer ID, take a competency test, take CPE courses and follow ethical guidelines. The changes will not apply to credentialed CPAs, EAs and tax attorneys who already have recognition with the agency. You can read more about the changes and specific details at www.cpata.com/go/2709. As the leading technology information resource for the professional tax and accounting community, The CPA Technology Advisor is not affiliated with any licensing organization, and its readership includes CPAs, EAs, members of the National Society of Accountants and many other professional organizations, as well as independent preparers. My personal belief is that this new attempt at regulation is a well-intentioned effort to protect taxpayers from the unscrupulous few who attract unwary consumers with promises of big returns, only to abuse the tax system and leave the taxpayers at great financial risk. These predators are more than a nuissance, they are a significant problem that costs our government millions and hurts consumers. The AICPA has come out generally in favor of the new requirements, but has expressed concern about extending "certification." “The AICPA worked closely with the IRS during the public comment period leading up to this proposal and we believe this change will foster greater compliance with the tax code and better, more reliable service for U.S. taxpayers across the board,” said AICPA President and CEO Barry Melancon. “However, we have concerns about the IRS plan to provide tax preparers who are not already CPAs, enrolled agents or attorneys with a certification based on limited qualifications,” he said. “A new IRS examination process may cause confusion among taxpayers about the relative qualifications of tax return preparers.” (More on the AICPA's comments.) The NSA hasn't offered a direct opinion on the issue, but has provided its members with an overview of the proposed changes and offers some skepticism as to how the IRS will be able to tackle the issue. "It is important to note that the IRS currently has no idea how it will test preparers, who will do the testing, and what database will be used. Consequently, there is no indication as to when this proposal can be implemented," read a statement on the National Society of Accountants' website. (The full statement is available here.) The National Association of Enrolled Agents (www.naea.org), has not yet weighed in on the proposals.   What do you think about the changes?

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