The IRS began planning a voluntary program after a court this year threw out a mandatory plan and that decision was upheld on appeal. The program required registration of paid preparers and those who were not CPAs, tax attorneys of Enrolled Agents faced mandatory continuing education requirements

“We believe a voluntary program would create confusion regarding the relative proficiencies of the various types of preparers.  In addition, the proposed voluntary system would undoubtedly leave the impression among most taxpayers that certain tax return preparers are endorsed by the Internal Revenue Service,” was part of the prepared statementsfrom AICPA CEO Barry Melancon, and Jeffrey A. Potter, chair of the AICPA Tax Executive Committee.

The letter said voluntary regulation would not address the problems the IRS is trying to solve. The two also criticized the IRS for moving too quickly to establish the new effort. Melancon and Potter noted the court case left mandatory registration and the issuance of PTINs in place and enables the IRS to gather data about specific preparers and classes of preparers and that the agency can tailor compliance and education programs based on its data collection.

Furthermore, Melancon and Porter also wrote that we “believe the IRS should administer the penalties and sanctions for which it currently has authority to identify and hold accountable incompetent and unethical return preparers.” 

They identified six specific penalties in their letter:
*Section 6694 – Civil penalties for understatements due to unreasonable positions or willful or reckless conduct.
*Section 6695 – Civil penalties for (1) failure to furnish a copy of the return to the taxpayer, (2) failure to sign the return, (3) failure to put the PTIN on the return, (4) failure to retain copies of returns prepared or a list of taxpayers for whom returns have been prepared; and (5) failure to comply with due-diligence requirements relating to EITC claims.
*Section 6701 – Civil penalties for aiding or abetting an understatement.
*Section 6713 – Civil penalties for disclosing or using taxpayer-provided information other than for return preparation.
*Section 7206 – Criminal penalties, including imprisonment, for willfully aiding or assisting in the preparation of a fraudulent return.
*Section 7407 – Authority to seek injunctions against return preparers engaging in specified behaviors, including fraudulent or deceptive conduct that substantially interferes with proper administration of the tax laws.