Articles

The National Society of Accountants this week asked that the Internal Revenue Service not exempt CPAs from requirements faced by other tax preparers and I have thought since the new preparer registration proposal was issued that exemptions were a bad idea. Although they will be required to obtain Preparer Tax Identification numbers, CPAs, tax attorneys and enrolled agents are exempt from testing requirements, which will take a few years to roll out.

I think letting CPAs pass on competency testing does not help the taxpaying public. Surely, most CPAs could easy meet the requirements. But there are those who wouldn't and the American Institute of CPAs, the state CPA societies and boards of accountancy don't appear to be geared up to actively weed out the weaker links through any consistent process.

An executive with a tax software company, who had an obvious ax to grind, complained that IRS statistics show more problems with CPA-prepared returns than those from other sources. The reason, he said, was many CPAs don't prepare enough 1040s to stay in practice. Despite the obvious financial bias, it was hard to see any incentive for him to make up this report. The best medical advice is to seek heart surgery from doctors who perform many such operations and practice yields better results in most endeavors.

Certainly, there have been questions about the requirements regarding signing and non-signing preparers, especially in larger offices. But I can't shake the opinion that CPAs who touch tax returns ought to know what they are doing.

The latest proposal, like the existing exemption, has more to do with political power than it does with policing the tax preparation business. The NSA hit it on the head when it said the IRS should not give one group a competitive advantage by issuing free passes.

And that's what this is about. This is about the AICPA, which is acting for its members' benefit, trying to give them a competitive advantage. And that's the only thing it's about.

• Prev
• Next